High Street retailers recorded their strongest New Year sales growth for three years, according to the latest CBI Distributive Trades Survey

More than half of the monthly survey’s respondents - some 51 per cent - said January sales volumes were higher than a year ago, while 21 per cent said they were lower.

The balance of 30 per cent is the highest reading for January since 2004, and the strongest monthly balance since 2004. According to CBI, it far exceeded retailers’ modest predictions of four per cent.

The recent rise in interest rates came in the middle of the survey but a balance of 22 per cent of retailers still forecast higher year-on-year volumes for February, it said. Orders to suppliers were also strong, with a balance of 19 per cent of retailers saying volumes were higher than a year ago. This trend was expected to continue in February.

Opinions about sales also bucked a negative trend, with a balance of nine per cent of retailers saying volumes were good -the first positive reading since August 2004.

John Longworth, executive director of Asda and chairman of the CBI’s DTSPanel, said: “The pre-Christmas growth in year-on-year sales volumes has carried convincingly through into the January sales. It was a much better story than retailers had expected. However, the strong performance of the sector should not mask the fact that there will have been individual winners and losers on the high street.

“December's strong showing was driven by some very heavy discounting and it is likely January will be the same.”

He added: “While shoppers have an appetite for the high street at the moment, and the prospects for February are promising, we have yet to see the full impact of recent interest rate rises on their resilience.”

By sector, grocery stores enjoyed more success in January with a balance of plus 63 per cent reporting a year-on-year increase in volumes, the highest since May 2004.

However, specialist food outlets such as delicatessens saw weaker volume growth year on year; the balance reporting growth dropped from 88 per cent in December to 27.

By sector, food & drink wholesalers reported strong balances in January at some 39 per cent.

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