Figures from the Department for Business, Innovation and Skills also suggest this has also been a record year for small businesses, which have turned over £72 bn.
It said the retail sector now employs 10% of the UK workforce, equivalent to over 3m people and that Black Friday and Cyber Monday are expected to contribute to a "record sales jump", with November sales across the industry up 5.2% year on year.
Yesterday (23 December) was likely to be the busiest shopping day of 2014, the government said, with spending predicted to smash £1.3 bn.
Business Minister Matthew Hancock heralded the "return of the high street" and said the figures proved the UK is on course for prosperity. The big four grocers, which have been struggling with a fall in sales, may not share his optimism. John Lewis also reported a 2.4% year-on-year dip in sales for the week ending Saturday 20th 2014, though it blamed the 'Black Friday effect' on the fall.
"More business are starting up, thriving and creating jobs for people," he claimed.
"We have consistently backed retail and the review of business rates announced in this year’s Autumn Statement should be another big boost for Britain’s high streets.
Nick Boles, Minister responsible for retail said: "High streets have cause for celebration after a bumper year of sales. We are determined to help them thrive and look forward to 2015, which I want to make an even more successful year for Britain's retailers."