Market Insight: Fairtrade & Eco-Friendly

The CBI has announced in its latest Distributive Trades Survey that retail sales grew at their fastest pace in two years and the high street is expecting growth to pick up further in the run-up to Christmas. The survey also showed that business sentiment about the retail sector over the coming three months is now positive for the first time since August 2007.

Responding to the survey, 40 per cent of retailers said that their volume of sales in the year to November had risen, while 27 per cent said they fell. The balance of 13 per cent of firms expecting an improvement over the next three months is the first positive result since August and the strongest since May 2004.

The volume of orders placed with suppliers (a balance of 12 per cent) rose for the first time since January 2008 and at the strongest rate since November 2007.

Looking at individual retail sectors, grocers and footwear and leather retailers reported strong growth in November, while durable household goods and furniture and carpets retailers saw sales volumes rise for a second month, but with much slower growth in the latter. Sales fell in the clothing and hardware, china and DIY sectors.

Chairman of the CBI Distributive Trades Panel, and Chief Operating Officer of Asda, Andy Clarke, said: "It’s reassuring that the high street now has a second month of sales growth behind it, and it looks like December will be even better. Christmas aside, this December will also be busy because shoppers are trying to beat the VAT rise in January, and many retailers are starting to target that behaviour."

In the wholesale sector sales volumes rose modestly (a balance of +4%), which was the first increase since May 2008, while orders with suppliers were cut only slightly. However, sales were below average for the time of year and a balance of 17 per cent expects the wholesaling business situation to worsen in the next three months.