But the rate of growth slowed compared with September – which was at a six-year high – but long term outlook remains unclear.
The CBI’s monthly distributive trades survey’s reported sales balance dipped to +36 in October from +49 in September, broadly in line with economists’ forecasts of a slowdown to +35.
Strong sales growth was not just down to seasonal factors, the research found.
A balance of 20 per cent of retailers said sales were above average for the time of year and the highest since May 2007.
“High street sales in aggregate have performed well again this month, but sales of durable household goods have slowed noticeably, in line with more subdued housing market activity of late,” said CBI chief economic advisor Lai Wah Co.
“Retailers expect sales growth to continue next month in the run up to Christmas.
“We should also see more of a boost to sales as shoppers seek to beat the New Year VAT rise, but looking beyond that, broader consumer caution may temper growth in spending into 2011.”
Sales of household goods have tailed off in line with the slackening housing sales market.
Meanwhile, clothes and other traditional retail goods held up well.
Howard Archer, chief economist at IHS Global Insight, said the survey was out of line with the “hard data”.
Archer added: “It needs to be borne in mind that the CBI distributive trades survey has recently given appreciably stronger readings than the hard retail sales data.
“In particular, the six-year high balance of +49 per cent in September contrasted with the Office for National Statistics reporting that retail sales volumes fell by 0.2 per cent month-on-month after a dip of 0.7 per cent in August.”
Retailers are now braced for a VAT hike set to be triggered in January.
Samuel Tombs at Capital Economics said the CBI data remained “misleadingly upbeat”. He said shoppers had been encouraged by the drop in VAT.