UK

Retail bounceback continues as stores enjoy second month of soaring trade with sales up 23 per cent

British retailers are continuing their booming sales as the bounce back from Covid lockdowns hopes to revive the flailing high street.

There was a slight slowdown from the the growth in June which was the highest in almost three years as shoppers rushed back after months of restrictions. 

The Confederation of British Industry‘s measure of the volume of sales compared with a year earlier dipped to 23  per cent from June’s 25 per cent, which was the highest since August 2018.

British retailers are continuing their booming sales as the bounce back from Covid lockdowns hopes to revive the flailing high street

Economists polled by Reuters had mostly expected a bigger fall to 21 per cent.

The CBI said the growth in orders was the fastest since December 2010 and the pace of sales was expected to pick up again in August.

However, sales were reported as in line with usual levels for the time of year, excluding the effect of Britain’s coronavirus lockdown.

CBI economist Ben Jones said consumer demand was supporting Britain’s economic recovery, although clothing and footwear stores in particular had yet to see demand recover.

‘While demand may be more stable, operational issues worsen,’ he said.

‘Relative stock levels are at a record low and expected to fall further still, while the number one worry for many firms at the minute is labour shortages throughout the supply chain as staff self-isolate.’

Despite the signs of recovery, many businesses were forced to permanently shut over the past year after the government forced them to close during lockdown

Despite the signs of recovery, many businesses were forced to permanently shut over the past year after the government forced them to close during lockdown

The Bank of England is keeping a close eye on how much Britons spend from savings Britons build up during the lockdown, which could prove a key driver of the country’s recovery from the COVID-19 pandemic.

It is also looking at whether bottlenecks in supply caused by the pandemic – such as dwindling stocks in the retail sector – will lead to longer-term inflation pressures.

Sales are now expected to rise at a faster pace next month, according to the CBI, but orders are likely to slow down.   

The CBI survey of 124 firms found that stock levels in relation to expected sales across the distribution sector reached a survey record low in July, for the second consecutive month.

The retail, wholesale and motor trades sectors all reported relative stocks as too low, with the situation expected to deteriorate further in August, the CBI added.

Mr Smith said: ‘Retail sales have been at or above seasonal norms for the last four months now, although this picture is not universal, with the clothing and footwear stores in particular yet to see demand recover to usual levels.

‘While demand may be more stable, operational issues worsen.

Ocado and other online retailers were among the winners of lockdown, with shares rising by almost a fifth

Ocado and other online retailers were among the winners of lockdown, with shares rising by almost a fifth

‘Relative stock levels are at a record low and expected to fall further still, while the number one worry for many firms at the minute is labour shortages throughout the supply chain as staff self-isolate.’

Latest footfall data showed that shoppers rushed back to the high street following Freedom Day last week, with an increase of 27 per cent on the same week in 2020.  

It was a rise of one per cent on the previous week as Britain’s recovery from the devastating pandemic hopes to continue.

Despite the signs of recovery, many businesses were forced to permanently shut over the past year after the government forced them to close during lockdown.

Last month, Gap confirmed it plans to shut 19 shops in the UK after the slump in trading.

It comes just months after high street giant Debenhams confirmed the last of its stores would close for the final time.

The department store launched a post-lockdown fire sale before the chain shuttered its stores, marking the end of a 242-year presence in Britain’s towns and cities.

It collapsed at the end of last year, with the closure of all its stores confirmed after Boohoo agreed to only buy its website and brand in a £55 million rescue deal.

It came in the same week as Topshop owner Arcadia, with the two failures putting around 23,000 people out of work.

The appalling toll of job losses was on a par with the collapse of Woolworths in 2008, which cost 25,000 jobs. 

Other businesses which responded well to lockdown such as online grocers and supermarkets have reported a surge in sales.

Ocado shares soared by a fifth year on year in the six months to the end of May. 


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