According to a recent survey by the Confederation of British Industry (CBI), seasonal clothing sales in the UK have been disappointing and are below expectations for this time of year. Furthermore, online sales growth has experienced a significant slowdown in June and is anticipated to continue declining in the coming months. Although department stores have seen a slight improvement in their fortunes, their performance is considered only “average” for the current season.
The survey also highlighted that general stock levels in the retail and wholesale trade sectors are at their lowest point in 38 years. Relative stocks were reported as “too low” in relation to expected sales. Unfortunately, there is no expectation of improvement in stock levels for the next month.
Despite these negative indicators, there is some positive news. The relaxation of lockdown measures on stores and the hospitality industry, coupled with increasing confidence among consumers due to the ongoing vaccination program, have resulted in the strongest overall sales since November 2016. The CBI survey included responses from 117 firms, 56 of which were retailers. It revealed that UK retail sales and orders experienced the fastest growth rate since August 2018 and September 2015, respectively. However, this growth was primarily driven by grocers, who reported sales exceeding seasonal norms, as well as sub-sectors related to home improvements.
In general, sales in the UK were significantly above seasonal norms, marking the highest level since November 2016. It is anticipated that sales will continue to remain strong in the following month. However, it is essential to interpret these indicators with caution, as they are being compared to June 2020, a period heavily impacted by the national lockdown.
Ben Jones, Principal Economist at the CBI, acknowledged the positive signs observed in June but emphasized that the retail industry still has a long way to go before achieving a full recovery. Inner-city footfall remains low, and there are supply pressures due to low stock levels and logistical challenges. Jones emphasized the importance of providing additional support to retailers, such as extending business rate reliefs and offering further assistance to businesses affected by the lockdowns.
In conclusion, while there are some encouraging developments in the UK retail industry, challenges and uncertainties persist. This calls for continued support and the implementation of strategies to aid in the industry’s recovery.
Useful links:
1. Telegraph: Britons rush back to the High Street
2. The Guardian: Online shopping growth slows down in June
