Feelgood factor helps to boost retail sales

The CBI distributive trades survey’s sales balance rose to +17 – matching January’s level – from June’s four-month high of +1.

The expected sales balance for August slipped to +10 from +13, though orders placed with suppliers rose at their fastest rate in six months.

“The feelgood factor from the heatwave and early summer sales has helped boost high street sales, after a very weak start to the year,” said Stephen Gifford, the CBI’s director of economics.

“A positive knock-on effect on retail sales from the royal baby has been mooted, but much more realistically, continued good weather and discounts will play a greater role in retail growth over the next month.”

The survey of 60 retailers saw year-on-year high street sales this month grow at a stronger pace than expected, after a flat first half of 2013.

But overall sales volumes remained below average for the time of year and sales growth is expected to ease back slightly in August.

The detailed findings show the strongest growth in clothing since February, a further rise in footwear sales and department store sales showed their strongest growth since 1983.

Other sub-sectors – including furniture & carpets and specialist food & drink – saw falling sales volumes, while grocery sales growth remained modest.

“A return to even modest spending is welcome news but the bottom line is that confidence will not bounce back fully until family finances improve significantly,” said Mr Gifford.