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British retailers have reported their strongest seasonal sales in more than four years in June, according to the CBI, as the rush back to the high street pushed stock levels to their lowest in 38 years.
The easing of lockdown restrictions on shops and the hospitality industry in England and Wales, coupled with growing confidence in going out as the vaccination programme continues apace, fuelled the strongest sales since November 2016.
As shoppers returning to physical stores the rate of internet sales slowed to the weakest pace since last April.
“After a generally gloomy 2021 so far, the sun finally shone for retailers in June, with seasonal sales volumes the strongest since November 2016,” said Ben Jones, principal economist at the CBI. “This was the latest sign that the success of the vaccination programme is feeding through to stronger consumer confidence which, along with the reopening of hospitality, is encouraging shoppers back on to the streets.”
However, retailers are struggling to keep up with demand with stock levels compared with expected sales demand hitting the lowest level since the CBI began monitoring levels in 1983.
The CBI’s monthly survey of 117 retail businesses found that companies operating in retail, wholesale and motor trades all reported relative levels of stocks as “too low”.
The survey, conducted between 26 May and 16 June, found that supermarkets, DIY shops, furniture, carpet and hardware stores continued to see strong sales as the British home improvement boom continues this summer.
Department stores have also seen an improvement in business, albeit only in that sales returned to historically average levels in June.
Clothing stores continue to report that sales remain poor for the time of the year, as uncertainty about holiday plans owing to changing travel restrictions means many consumers are holding off on a new summer wardrobe.
The CBI said that sales are expected to remain solid next month but warned that despite the positive figures the recovery remains “patchy” with city shopping lagging behind retail parks.
“The sector remains a long way from a full recovery,” said Jones. “The return of demand is patchy, with inner-city footfall still well down. The outlook is clouded somewhat by supply pressures, with stocks seen as too low compared with expected sales, as logistical and capacity challenges continue to hamper global activity.”
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