Retailers are preparing for surge in sales in September, according to surveys

By BEN LAURANCE FOR MAILONLINE
Updated: 17:20 EST, 26 August 2010

Retailers are predicting a surge in sales as the summer draws to a close, a survey showed yesterday.

Most shops saw sales volumes in the first half of August higher than a year earlier. Some 53pc of retailers said volumes were up, with only 18pc recording a fall. The finding, in the CBI Distributive Trades Survey, marked the strongest picture since April 2007.

The best growth was in clothing, grocery, household goods, footwear and DIY.

Shop till you drop: Retailers are predicting a surge in sales during September

And looking ahead, the shops' predictions for September are even more bullish.

The upbeat tone is reflected in retailers' investment plans. For the first time since 2004, retailers expect to invest more in the coming year than they did in the last 12 months.

The CBI is still hesitant about the outlook for consumer spending.

'The broader outlook for consumer spending is still uncertain, given the VAT rise next year, subdued pay awards and the feed-through of public spending cuts to job losses,' said Lai Wah Co, the CBI's head of economic analysis.

The latest findings from the CBI indicate that business on the High Street is far stronger than suggested by other recent surveys. The British Retail Consortium's most recent data suggested that sales of clothing and other goods, excluding food, slowed in July. It also said shoppers are hesitating about buying big-ticket items.

Analysts expect retail demand to be strong towards the end of the year  -  particularly for expensive merchandise, where next January's VAT increase will make a significant difference to prices. But the outlook for 2011 looks more difficult.

Recent data also suggest a shift in the pattern of where people shop. For more than five years, sales growth through out-of-town shopping centres has been stronger than on the High Street.

But this year the increase in the number of people going to outoftown stores appears to have slowed.

Sharp price increases helped prop up sales at jewellery chains Ernest Jones and H Samuel, according to parent company Signet (up 81p at 1811p). Prices in the most recent quarter were 12pc higher than a year earlier.

Profit margins in Signet's 548 UK shops are coming under pressure, the firm said, and it expects that to continue. Most of Signet's business is in the US, where there was strong underlying sales growth.

The group's quarterly income rose 47.5pc to £26.2m.