UK Retailers See Solid Sales Growth as Christmas Looms

UK high street — Retailers have suffered in recent years because of the weakness in consumer finances, but confidence and sales are returning to the high street Reuters

Britain's retailers are set to enter the 2014 Christmas season on a strong platform with robust sales growth in September.

They expect sales to continue growing in October, though at a slightly slower pace in the lull before the festive rush when consumers buy presents.

The Confederation of British Industry (CBI) said in its monthly survey that 48% of retailers saw sales volumes increased, while 17% said they fell, giving a balance of +31% sales growth during September.

Growth was spread across all sectors, though the pace of growth slowed markedly in the grocery sector (+25%).

Overall, 42% of retailers said they expect sales volumes to increase in the year to October, while 16% said they will fall, giving a balance of +26%.

A several-year squeeze on household finances is beginning to ease with low inflation and the beginnings of a pick-up in wage growth at private sector firms. Retailers are set to be among the biggest beneficiaries.

"Solid growth continues on the high street, with most sectors doing decent business and department stores performing particularly well," said Rain Newton-Smith, director of economics at the CBI.

"However, the pace of growth in the grocery sector tailed off significantly compared with the previous survey. Retailers are expecting sales to grow again next month, but at a steadier pace."