Retailers "feeling quite optimistic" ahead of Christmas as retail sales rise

Retail prices grew by a balance of 17 per cent, down from 23 per cent in the previous quarter. The figure is expected to be repeated in December.

Grocers, footwear and leather retailer saw strong sales growth in November. Durable household good, furniture and carpets also saw sales growth for a second month, but at a slower rate. Sales fell among clothing and hardware, china and DIY retailers.

In the wholesale sector sales volumes increased by a balance of four per cent, the first increase since May 2008 and motor traders saw year on year sales increase by a balance of 10 per cent, also the highest since May last year.

Andy Clarke, Chairman of the CBI Distributive Trades Panel and Chief Operating Officer of Asda, said, "It’s reassuring that the high street now has a second month of sales growth behind it, and it looks like December will be even better. A lot of retailers have suffered during 2009, and many are relieved that the year is ending on a more positive note.

“Despite the more upbeat mood and pre-Christmas sales growth, consumers are still worried about job losses and a weak economy. In 2010 the high street will find that recovery is fragile and slow.

“Christmas aside, this December will also be busy because shoppers are trying to beat the VAT rise in January, and many retailers are starting to target that behaviour.”

Richard Lowe, Head of Retail and Wholesale, Barclays said, "Christmas is in full swing on the high street, and retailers have their sights set firmly on bringing customers in-store to spend early with many opting to advance their seasonal sales or for flash discounting. Sales as a result are looking more healthy and retailers will be encouraged by rises in clothing and household goods sales. There is a continued positivity in sales figures in early November echoing those of September and October.

"Variable weather and spending habits have also had an effect on current sales performance. Over the last month anecdotal evidence has pointed to increases in weekend shopping, as well as consumer trends towards more self-indulgent Christmas spending on food and drink rather than gifts. The colder, wetter weather we are now experiencing in particular is likely to boost sales of clothing and other winter essentials, as shoppers finally prepare for the changing season.

"Carefully considering the New Year's forthcoming VAT increase, Christmas shoppers may be looking to purchase big-ticket items for themselves as well as the traditional items on their gift lists. Retailers have had all year to prepare for the return of VAT to at least 17.5%, with stocks now under much tighter control and their eyes fixed on margin management, the increase will come as less of a shock to the system than the sudden rate cut last year."