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Retailers see sales volumes grow in early December

UK retailers enjoyed a return to strong year-on-year growth in sales volumes in early December, after a poor showing in the previous two months, a survey has found.

The distributive trades survey, published yesterday by the Confederation of British Industry, signals retailers may have fared better at the start of the key festive trading period than might have been expected in light of continuing worries over the sustainability of consumer spending growth.

It showed that clothing retailers and department stores enjoyed buoyant trading in early December. The survey also signalled strong showings in the furniture and carpets, and hardware and DIY categories.

Of retailers surveyed between November 27 and December 11, 48% said sales volumes were up on a year earlier and only 14% reported they were lower.

The net 34% reporting a year-on-year rise in sales was way ahead of respective corresponding balances of 2% and 1% in October and November, but matched the September reading.

Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "The CBI... survey indicates that retail sales gained appreciable momentum over the first half of December, after muted sales in November and October. This suggests lack-lustre October and November sales largely reflected consumers taking a breather before Christmas, after spending at a robust rate over the summer.

"With purchasing power being limited by consumer price inflation running well above earnings growth for a prolonged period, it is likely that many people have felt the need to control their spending."

He added: "While the robust CBI survey for December lifts hopes this will be a good Christmas for retailers, it needs to be taken into account that November and October were disappointing, so many retailers may still feel compelled to engage in significant discounting and promotions over the final few days before Christmas to try to give a final lift to sales.

"Given the squeeze on purchasing power, it is highly likely many consumers have delayed much of their Christmas shopping until late on, in the hope of getting late bargains."

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