Sales growth at fastest pace in two years, say the CBI, with predictions it will pick up further in the run-up to Christmas.
The Confederation of British Industry (CBI) has revealed that 40% of retailers reported an increase in sales volume in the year to November 2009.

It was also revealed that 27% of respondents in the CBI's Distributive Trades Survey said that their volume of sales had fallen. However, the resulting balance of 13%, reflects a second consecutive month of growth - the highest balance since November 2007.

The CBI said that the business sentiment about the retail sector over the coming three months is now positive for the first time since August 2007.

A balance of 19% of retailers expect that, when compared with last December, sales volumes will improve next month in the critical pre-Christmas period.

Retail prices also continued to grow at a balance of 17%, although this is slightly slower than firms reported in the last quarterly survey. However Prices are expected to rise at the same pace next month.

Durable household goods and furniture and carpets saw sales volumes rise for a second consecutive month, while sales fell in the clothing and hardware, chine and DIY sectors.

CBI Distributive Trades Panel chairman and Asda chief operating officer commented: "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."

Among the questions asked in the survey, a balance of 27% of firms reported that they had reduced their headcount, and the same rate is forecast for December. While this result demonstrates that retail employment conditions remain tough, said the CBI, November's figure is not as weak as the 41% recorded in August.