Belfast Telegraph

Sales soar as shoppers race to avoid VAT rise

The high street has enjoyed its strongest sales growth in eight years as shoppers look to beat January's VAT rise, the CBI has said.

Despite the potential impact of snow and freezing conditions on footfall, the business lobby group reported that a balance of 56% of retailers said volumes were stronger than a year ago in early December - contributing to the survey's highest reading since April 2002 and the sixth strong month in a row.

Hardware and DIY stores benefited from the surge in demand, while clothing, grocery goods and department stores also did well. However, retailers are braced for slower growth from next month when a balance of 35% expect sales to be higher than a year ago, compared with 52% recorded last month.

Ian McCafferty, CBI chief economic adviser, said that sales on the high street continued to rise strongly compared with a year ago, reflecting a stronger crucial pre-Christmas trading period.

The CBI remains cautious about prospects for the retail sector given concerns over consumer confidence in the new year. VAT is due to increase from 17.5% to 20% on January 4.

The CBI's strong December sales figures also reflect comparisons with the tough trading conditions seen on the high street a year earlier.

A balance of 52% of retailers said they placed more orders with suppliers than a year ago - the highest reading since December 1983 - as firms replenished stocks ahead of the festive period.

However, this falls to a balance of 24% when firms are asked if they expect to increase orders next month, the CBI added.

The CBI's strong December sales figures also reflect comparisons with the tough trading conditions seen on the high street a year earlier.

Graeme MacLaughlin, relationship director at Barclays Corporate said the strong performance would continue in Northern Ireland.

"Big ticket items will be promoted heavily in a bid to convince consumers to splash out before the impending VAT rise," he said.

"This weekend, the last full weekend before Christmas, will be key with retailers hoping shoppers are willing to brave the cold with forecasts of more snow on the way."

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