Shanghai's retail sales grew at the fastest pace in three years last month as spending surged during the Spring Festival holiday.

February sales hit 31.21 billion yuan (US$4.03 billion), up 15.6 percent from a year earlier, the Shanghai Statistics Bureau said yesterday. The growth, following a 9.7-percent rise in January, was the largest since April 2004.

For the first two months combined, sales climbed 12.6 percent from a year earlier to 61.34 billion yuan.

"Various festivals including Spring Festival and Valentine's Day offered retailers a great opportunity to pocket profits," said Wu Yanrong, a statistician at the Shanghai bureau.

Promotions sent sales at the city's 333 major retailers up 14.4 percent to 3.22 billion yuan during the "Golden Week" starting February 18. The Shanghai Outlets Brand Direct Sale Plaza in Qingpu District, the city's first brand-name discount mall run by retail giant Shanghai Brilliance (Group) Co Ltd, delivered average daily sales of 3.96 million yuan during the period.

Meanwhile, sales at restaurants surged 26.4 percent to 4.38 billion yuan last month, compared with an 19.6 percent increase a month earlier, led by more family gatherings during the Chinese New Year.

Among non-food categories, home improvement products and cars remained the two hottest spots, rising 20.5 percent and 8.7 percent respectively during the first two months, the bureau said.

"Higher incomes are causing residents to improve their living conditions," Wu said.

Disposable income for Shanghai's urban dwellers grew 10.8 percent to 20,668 yuan in 2006 while the figure for rural residents climbed 10.4 percent year-on-year to 9,213 yuan.