CBI survey finds sharp revival in the high street

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The Independent Online
RETAIL sales revived sharply in the year to June after a slowdown in the 12 months to May, according to a Confederation of British Industry survey, writes Diane Coyle.

Nigel Whittaker, chairman of the CBI's distributive trades survey panel, said: 'The pick-up in retail sales volumes in June is a further sign that the high street recovery remains firmly on course. However, we still need to be cautious as consumers have yet to feel the full impact of tax rises announced last year.'

Economists had expected the June CBI survey results to be hit by weekly train strikes and hot weather.

A Gallup survey of consumer confidence published yesterday showed a slight decline in confidence in July compared to June. It suggested consumers were still cautious about developments in the economy.

Official retail sales figures due out tomorrow will provide more definitive evidence on how April's tax increases are affecting consumer spending.

The CBI's distributive trades survey showed a balance of 27 per cent of the retailers questioned reporting an increase in sales volumes, up from 12 per cent in May.

Mail-order firms reported by far the strongest gains, followed by the big multiple retailers. Footwear retailers, off-licences and booksellers enjoyed big increases, but hardware, china and do-it- yourself retailers suffered reductions in sales. The balance expecting an increase in July has risen to 30 per cent - the highest since December.

Wholesalers' sales volumes grew at their fastest rate since September 1987. A balance of 64 per cent reported rises compared to an expected 48 per cent, while the balance expecting an increase in July has climbed from 48 per cent to 54 per cent. Nearly a third of wholesalers said sales were above average for the time of year.

Only motor traders were disappointed. Sales volumes rose for a balance of 12 per cent of them in the year to June, but 25 per cent had expected an improvement. Sales in June were considered to be below average for the time of year. Sales of parts and accessories registered a strong increase but sales of vehicles barely changed.