The Confederation of British Industry's latest distributive trades survey, conducted between July 29 and August 14 and published yesterday, also highlights UK retailers' expectations of further strong year-on-year growth in sales volumes next month.
Clothing shops, department stores, the grocery category, and furniture and carpet, hardware and do-it-yourself and recreational goods outlets have all recorded strong year-on-year growth in sales in recent weeks, according to the CBI survey. However, specialist food and drink stores reported another sharp year-on-year fall in sales volumes.
Barry Williams, chief merchandising officer for food at supermarket group Asda and chair of the CBI distributive trades survey panel said: "The feelgood factor from the heatwave, summer sales, royal baby fever and sporting victories has helped boost the high street, with clothing retailers and grocers benefiting in particular."
However, he highlighted the pressure on household incomes at a time when earnings continue to fall in real terms.
He added: "A rise in spending is welcome news, but the bottom line is that confidence will not bounce back fully until family finances improve further.
"This isn't a time to rest on our laurels as shoppers may return to cautious spending until they see a sustained improvement to the pound in their pocket or, dare I say it in August, until the festive spirit kicks in."
Subtracting the 22% of retailers reporting a year-on-year fall in sales volumes in the survey from the 49% posting a rise, a net 27% enjoyed an increase. This is a significant improvement on a comparable net balance of 17% in the CBI's distributive trades survey last month, and signals a sharp acceleration of year-on-year growth in sales volumes.
In the June survey, only net 1% of retailers reported a year-on-year rise in sales volumes.
A net 26% of retailers projected year-on-year growth in sales in September. Meanwhile, a net 14% of retailers reported growth in employment.
Michael Pearce, assistant economist at consultancy Capital Economics, said: "The improvement in the CBI survey suggests that the underlying recovery in the retail sector has strengthened. After rising sharply in July from plus-1 to plus-17, the CBI's reported sales balance rose further to plus-27 in August.
"On the basis of past form, this is consistent with annual growth in the official measure of retail sales volumes of around 5%."
He added: "However, the inability of retailers to push through price rises underlines that the recent consumer recovery is not yet strong enough for retailers to rebuild their margins."