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However, it expects retail sales growth to slow down next year, as a result of the fall in sterling prompted by the Brexit vote in June.
The weaker pound makes imports more expensive and pushes up inflation.
Clothing saw particularly strong growth in sales volumes, while grocers had their best results since January.
This latest CBI Distributive Trades Survey covers the last week of November and the first two weeks of December and included the pre-Christmas discounting day, Black Friday on 25 November.
Hardware and DIY and internet retailers also reported strong growth. Wholesalers saw their strongest growth in volumes for nearly 18 months.
"It's encouraging to see retailers reporting another month of healthy sales growth leading up to the festive season, which rounds off a fairly solid quarter," said Ben Jones, CBI principal economist.
However, he added: "While we still expect to see decent growth in the near term, the pressures on retail activity are likely to increase during 2017, as the impact of sterling's depreciation feeds through.
"With higher inflation beginning to weigh on households' purchasing power, consumption patterns are likely to shift, creating winners and losers across the retail landscape."
Wholesalers reported the strongest growth in volumes for nearly 18 months in the year to December.
Last week's official retail sales figures showed volumes jumped by 5.9% in November compared with the same month last year as shoppers took advantage of Black Friday discounts.
But higher fuel costs meant the rise was not as strong as in October, when annual retail sales growth hit a 14-year high of 7.2%.
UK retail sales volumes rose at their fastest pace since September 2015 in the year to December, according to the employers' organisation the CBI.