Retail sales up as confidence returns


British retailers have reported that sales hit a 20-month high during August, with the holiday period providing an unexpected boost to business prospects across the country.

But the Confederation of British Industry (CBI) monthly survey also reveals that the number of retail positions being filled has fallen, albeit at a slower rate than the corresponding period last year.

Today's report shows that for the first time in almost two years, more retailers have reported takings to be increasing rather than falling, with an overall balance of plus 12 the strongest since December 2004.

Businesses are optimistic about the coming months as well, with a balance of plus 13 saying the sales will be positive in September.

The CBI survey claims that the trend of heavily discounting products is dissipating, with product prices rising in the month of August for the first time since 2004.

In terms of individual sectors, grocers and retailers of household goods experienced the healthiest sales, while confectioners, tobacconists and newsagents also enjoyed rising takings for the first time since spring.

But there was less good news for shoe shops, booksellers, stationers and specialist food retailers, who all lost ground.

John Longworth, executive director at Asda and chairman of the survey panel, said that the surprising growth during the summer holidays represented a "welcome relief" to retailers.

"There is every reason for retailers to feel positive and this is reflected in the survey. Some sectors have done better than others, though, and the Bank of England must be cautious about raising interest rates again as we wait to see the true impact of August's rate rise on the retail sector and wider economy," he added.

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