Fears of a Christmas crisis in the High Street have been quashed by a report showing that shop sales bounced back in December from a sharp downturn in the previous month.

The CBI's authoritative monthly distributive trades survey for last month said sales volumes "recovered" after a "marked" slowdown in November.

Looking ahead, the CBI noted that a positive balance of 40% of companies were expecting year-on-year sales volumes to rise next month.

A positive balance of 22% of firms expect orders placed on suppliers to rise in January, while a positive balance of 16% of firms expect stock levels to remain more than adequate in the same month.

Alastair Eperon, chairman of the CBI's distributive trades survey panel, said: "Although the underlying rate of increase was below that of a year ago, retailers will have been relieved at the improvement in sales growth in December, particularly as growth expectations had not been met in seven out of the previous twelve surveys."

He added that the CBI would monitor January's figures closely to see whether the "slight upward momentum" in consumers' spending was sustainable.

The CBI said that with the exception of footwear and leather retailers, all sectors reported some annual growth in sales volumes during December compared with a year earlier, with the largest increases being reported by booksellers, chemists, grocers and stores selling clothing, hardware, china and DIY goods.

The evidence in the CBI survey was borne out by a clutch of upbeat Christmas trading statements from retailers.

Sportswear group JJB, run by former Blackburn Rovers player David Whelan, reported a 47% surge in sales for the six weeks to December 28 against 1996 figures.

Merchant Retail Group, the specialist perfumery chain and department stores company, said Christmas trading was "excellent" with strong sales during its financial third quarter and post-Christmas sales had begun "exceptionally well".

The business, which runs The Perfume Shop and Joplings stores, said it would exceed expectations for the current year. Total sales were 17% ahead of the previous year during the 13 weeks to December 27.

Majestic Wine said a seasonal rush for champagne, claret and Australian wine helped boost its sales during the festive season after a 22% increase in the eight weeks from November 4 to December 29.

Chief executive Tim How said: "We are very pleased with the sales achieved at Christmas from both existing and new stores."

And Liverpool-based discount department store operator TJ Hughes said it also enjoyed a "successful" Christmas with sales up 17.8% for the five weeks to January 3.

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