The CBI said 35 per cent of retailers expected growth to rise at an even faster pace in the year to September.
Supermarket sales volumes rebounded up 16 per cent from zero in July due to low prices. Clothing stores also saw a 61 per cent jump, with online retailers seeing an increase of 39 per cent.
The biggest losers were footwear and leather, and furniture and carpets retailers, which saw volumes fall by 70 per cent and 33 per cent respectively.
The CBI said retailers expected the general business situation to improve over the coming three months and as a result have raised their headcounts for the first time in 2015.
A total of 36 per cent of firms said they had increased their staff numbers, with 20 per cent saying numbers had fallen.
Firms are expected to continue recruiting at a robust pace in the year to September, with expectations at their strongest since May 2000. In addition, firms plan to raise investment in the coming year, with plans for capital spending turning positive for the first time in three quarters.
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Rain Newton-Smith, CBI director of economics, said: “Retail growth is continuing at a steady pace and it’s really encouraging to see firms’ investment intentions picking up alongside more jobs being created in the sector. Household spending seems to have remained firm going into the second half of this year, so the outlook for the retail sector looks upbeat.
“However, the renewed fall in average selling prices illustrates the intense challenges facing some retailers – particularly grocers – where strong price competition to capture consumer value is still prevalent.”
Retailers are expecting a bounce from the upcoming Bank holiday weekend despite unpredictable weather. Retail experts Springboard are forecasting sunny sales.
It said footfall across British high streets, shopping centres and retail parks is set to increase by 4.7 per cent, year-on-year, over the long weekend. Footfall on Monday itself, spurred by last-minute back to school shopping, will rise 7.9 per cent.
Diane Wehrle, insights director at Springboard said; “Favourable inflation rates, low unemployment and evidence of UK-wide pay rises have given consumers a new bout of confidence. Retail spend is increasing with figures from the British Retail Consortium showing an increase of 3.2 per cent in non-food spend in the last quarter, and with fine weather expected this weekend we expect shoppers to venture out with new-found force.”
Online retailers can also expect a boost with the Spring 2015 and August 2014 Bank holidays seeing an average 70 per cent surge.
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