LONDON (SHARECAST) – Shoppers defied the gloom surrounding the government’s spending review with the majority of retailers seeing sales rise in October, according to the latest survey by employers lobby group, the CBI.
It was the fourth month running sales rose, although the pace of growth did slow from September.
Some 58 percent of retailers saw sales rise in October against 22 percent seeing a fall, a balance of +36 percent compared with a balance of +49 percent in September.
“High Street sales in aggregate have performed well again this month, but sales of durable household goods have slowed noticeably, in line with more subdued housing market activity of late,” Lai Wah Co, the CBI’s head of economic analysis, said.
The balance looking ahead to November showed 43 percent more retailers expect a higher volume of sales than a year ago.
“Retailers expect sales growth to continue next month, in the run-up to Christmas. We should also see a boost to sales as shoppers look to beat the New Year VAT rise,” the CBI said.
“But looking beyond that, broader consumer caution may temper growth in spending in 2011.”
Howard Archer, chief economist at Global Insight, said the figures were “decent” numbers. Sales of clothing, footwear and leather were reported to be particularly healthy in October. However, there was a notable slowdown in demand for durable household goods, which was highly likely to have been influenced by muted housing market activity.
“It is likely that retail sales will be supported in the final two months of the year by consumers looking to make purchases of more expensive items ahead of the January VAT increase from 17.5 percent to 20 percent,” Archer added.
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