Retailers saw sales and consumer confidence rise this month, boosting hopes on the high street for a healthy festive season.
The British high street enjoyed a boost in the run-up to its key Christmas trading period, as sales gathered momentum and consumer confidence picked up this month.
Retailers put more staff on the shop floor as November (Xetra: A0Z24E - news) saw sales increase year-on-year for a third consecutive month, according to the CBI’s latest quarterly distributive trades survey.
The pick-up came as the GfK (Xetra: 587530 - news) index tracking consumer sentiment climbed eight points this month to a reading of -22, the seventh highest increase since the index began in 1974. The survey has averaged a reading of -29 this year.
The figures boosted hopes that consumer spending will hold up during the festive season and make a positive contribution to growth for the quarter as a whole. Howard Archer, UK economist at IHS Global Insight, said: “This is vital if the economy is to keep growing in the fourth quarter following the better-than-expected third quarter GDP rebound.”
The CBI survey showed that 49pc of retailers said their sales volumes were up compared to a year ago, while 17pc said they fell. The resulting positive balance of 33pc was the highest reported in the survey since June.
Businesses acknowledged that sales remained below normal levels, but the above-expectations performance came as a welcome surprise given the problems on the high street.
The prospect of electrical retailer Comet being saved is fading rapidly, while earlier this month sportswear chain JJB Sports collapsed into administration. Analysts suggested that consumers may be feeling less pressure compared to this time last year, and that higher employment is translating into stronger spending.
All measures of consumer confidence tracked by GfK, on behalf of the European Commission, improved compared to the previous month, with the biggest pick-up in sentiment seen around the UK’s economic outlook.
“This could be because consumers now think things can’t get any worse or it may be for more positive reasons, but either way it is good news as we look ahead to 2013,” said Nick Moon, managing director of social research at GfK.