UK high street sales up for third month running

Sales on the high street were higher than a year ago in September, representing the third consecutive year-on-year increase and surpassing expectations, according to the latest CBI quarterly Distributive Trades Survey. Retailers expect another strong rise in sales next month.

Sixty per cent of retailers surveyed said the volume of sales rose during September, while 11% said it fell, giving a balance of +49%. This was the highest balance since May 2004 (+51%), and compares with an expected figure of +39% last month.

Sales volumes (+14%) were also above average for the time of the year for the first time since June 2007.

This increase was also reflected in the volume of orders placed upon suppliers (+39%), which rose strongly again on a year ago, surpassing last month’s prediction of +29%.

The clothing and footwear and leather sub-sectors saw particularly strong sales growth, which are likely to have been boosted by the arrival of new autumn ranges. Solid sales growth was also recorded in the furniture and carpets sector.

Looking to October, a balance of +47% of firms expect a higher volume of sales than a year ago.

Ian McCafferty, CBI chief economic advisor, said: “High street sales have performed well again this month, with growth better than retailers predicted. The Bank Holiday weekend, combined with the tail-end of summer sales have resulted in a bumper period for retailers. Clothing and footwear sales in particular look to have been boosted by the launch of new autumn ranges.

“Retailers expect sales growth to continue next month and, as we get closer to January, sales will be helped by households seeking to beat the VAT rise. However, weak prospects for take-home pay mean consumer spending is likely to be fairly restrained in 2011.”

Sales volumes rose for the second month in wholesaling, but the increase was slower than in August. A broadly similar rise in sales is predicted next month. 47% of wholesalers said that volumes were higher than a year ago and 33% said they were down, giving a balance of +14% which was slightly lower than expected last month (+22).

In the motor trade the volumes of sales were flat on a year ago (a balance of 0%), although this was not as weak as the -21% expected last month. Next month sales are expected to be higher than a year ago (a balance of +18).