Shop sales buoyant again after two-month stagnation

RETAIL sales rebounded in the run-up to Christmas after weakness in the two previous months, the Confederation of British Industry said on Wednesday.

The CBI distributive trades survey’s retail sales balance surged to +34 in December, matching September’s 15-month high, after stagnating at +1 in November.

Orders placed with suppliers rose particularly strongly, with this component increasing to +25 from +1, its highest in more than a year, and retailers said they expected further strong sales in January.

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After a disappointing couple of months, sales volumes in December recovered their sparkle, beating retailers’ expectations,” said Barry Williams, who chairs the CBI survey panel and is a senior executive at Asda, the Leeds-based supermarket giant.

“Customers have clearly held off spending through the autumn and we’re only now seeing them start to hit the stores,” he added.

Clothing sales in particular had been weak in October and November due to milder than usual weather, which dissuaded shoppers from buying new winter clothes.

Tom Vosa, chief economist at Yorkshire Bank, said: “Retailers are not expecting a massive sales season, hinting that weak consumption data at the end of 2013 and at the start of 2014 will give the Monetary Policy Committee the breathing space that they need to keep rates on hold.”

Howard Archer, chief UK economist at IHS Global Insight, said: “Markedly rising employment and a strengthening housing market are supportive to retail sales, while consumer confidence is at a much stronger level than it has been for a long time.”

Retail sales volumes grew 1.8 per cent on the year in October according to official data released last month. The Office for National Statistics releases its November retail sales data today.