UK retailers enjoyed their best sales in more than a year following the reopening of non-essential stores in mid-June, according to the latest snapshot of spending from the CBI.
The employers’ organisation found there had been a much sharper bounce-back than retailers had been expecting following the lifting of restrictions imposed to limit the spread of the Covid-19 virus.
More retailers said business was up year on year than reported a decline – 47% to 43% – the strongest showing by the CBI’s distributive trades survey since April 2019. The +4 percentage point balance followed negative readings of -55 in April, -50 in May and -37 in June.
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The CBI said the recovery was largely the result of sales of groceries, although there had also been a pick up in demand for hardware and DIY products, cards, flowers and stationery.
The survey of 62 retailers – conducted between late June and mid-July – found that sales were seen as average for the time of year, the highest balance since November 2019. Sales were expected to be remain close to seasonal norms in the coming month. Orders placed by retailers on their suppliers fell for a fourth month, but at a slower pace than between April and June.
Rain Newton-Smith, the CBI’s chief economist, said: “It’s great to see retail sales stabilise this month, but this doesn’t tell the whole story. This crisis has created winners and losers within the retail sector and for some businesses the picture remains bleak.
“The reopening of non-essential retail was a vital step towards recovery but isn’t a cure-all. The government has provided critical support for firms and jobs throughout the crisis. But ongoing financial pressures are a major challenge for some retailers, and additional direct support to shore up cashflow, such as extension of business rates relief, should be considered.”
The distributive trades survey – which also covers wholesalers and motor traders – was in line with the latest official data showing a marked pickup in retail sales in June. Car dealerships reported their first annual sales growth since February, following a period in which business had come to a virtual standstill.
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