Surprise jump in high street sales

Friday, 26 February 2010 10:22

By myfinances.co.uk staff

High street spending confounded expectations in the first half of February, with sales showing the strongest growth for over two years.

New figures from the Confederation of British Industry (CBI) show that despite forecasts of flat performance, 46 per cent of retailers experienced an increase in business, while 23 per cent said sales were lower. The resulting balance of plus 23 per cent is up from minus eight per cent in January and is the highest figure since May 2007.

Furthermore, a balance of 16 per cent of high street firms forecast year-on-year growth in sales volumes in March.

The CBI said that 40 per cent of retailers reported strong price rises during February. This was mostly down to VAT returning to 17.5 per cent at the start of the year.

A balance of 43 per cent of retailers expected further increases next month.

Andy Clarke, chairman of the CBI Distributive Trades Panel and chief operating officer at supermarket chain Asda, said: "While retailers see some growth ahead, the road to recovery through 2010 is likely to be fragile.

"Worries about the economy and upcoming pay freezes are likely to ensure that shoppers remain cautious."

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