According to the latest CBI quarterly Distributive Trades Survey, retailers expect sales to continue growing in September and are more optimistic about the general business situation in the coming quarter.
Over half of the retailers surveyed (53 per cent) said the volume of sales rose during the first two weeks in August while only 18 per cent said that it fell.
The balance for the underlying trend, the three-monthly moving average of sales volumes, was up by 21 per cent, which is the strongest figure since July 2007, when it rose 22 per cent.
Looking to September, retailers expect sales growth to remain strong, with a balance of 39 per cent expecting volumes to be higher than a year ago.
Numbers employed in the retail sector were broadly unchanged in the year to August, which is the first time since February 2004 that a fall in employment hasn’t been recorded in the quarterly survey.
For the third quarter running, price inflation has accelerated. In this survey, 66 per cent of firms said average selling prices rose compared to a year ago, and nine per cent said they fell. This is the fastest pace of price since February 1992.
Reflecting the recent run of better retail sales, a net 22 per cent of firms expect the overall business situation will improve in the coming three months, with sentiment at its most positive since May 2004.
Furthermore, for the first time in six years, retailers expect to invest more in the coming year than in the last one.
Lai Wah Co, CBI head of economic analysis, said: “Better sales growth continued on the high street in early August, and retailers are upbeat about prospects in the coming three months.
“Retailers are hopeful that strong sales growth will continue next month. However, the broader outlook for consumer spending is still uncertain, given the VAT rise next year, subdued pay awards and the feed-through of public spending cuts to job losses.”