Retail summer sales hit a four year high in June, according to figures from the Confederation of British Industry (CBI) cited by the Guardian. As Covid restrictions lift, shoppers are returning to the high street, causing online sales to slow.
The combination of growing confidence as a result of the UK’s vaccination programme, and the easing of lockdown restrictions, has driven sales up. The result has been the strongest sales since November 2016.
With consumers heading back to the high street, the rate of online sales slowed to its lowest level since April 2020.
And as shoppers are encouraged back into physical stores, retailers are struggling to keep up with demand. The stock level versus expected sales demand ratio plummeted to its lowest level since the CBI first started monitoring it in 1983.
In the survey of 117 retailers, CBI found that retail, wholesale and motor trade businesses all described relative stock levels as ‘too low’. This is a trend we are seeing in many developed countries, driven by a global shortage of raw materials and supplies. The fear now is that manufacturers will be forced to drive up prices, the impact of which will hit consumers in the pocket, too.
According to a number of experts, the UK is poised on the edge of recession. The Resolution Foundation think-tank predicts consumer price inflation could rise to 4% this year. Meanwhile, the Bank of England monetary policy committee anticipates it will rise to above 3% (but is yet to specify an exact figure).
For now, sales in many areas look strong – home improvement, in particular. The CBI survey revealed that supermarkets, DIY, furniture, carpet and hardware retailers have all experienced strong sales this summer.
Department stores have seen sales return to expected levels for June.
However, clothing shops are reporting slow sales with the majority of shoppers reluctant to buy a new summer wardrobe with the ongoing uncertainty around overseas travel.
There is still some way to go for retailers. Speaking about the findings, Ben Jones, CBI’s principal economist, stated: “The sector remains a long way from a full recovery.”
He continued: “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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