​Seasonal clothing sales “poor”, online sales slow sharply in June - CBI survey

By

Nigel TAYLOR

Published
Jun 28, 2021

First the bad news. Clothing sales for June were “poor for the time of year”, according to the latest Confederation of British Industry (CBI) survey.

What’s more, growth in online sales slowed sharply this month and they’re expected to slow gain next month too. And while department stores’ fortunes were “lifted”, they were only described as “average” for the time of year.

And the news on general stock levels wasn’t at all good. In relation to expected sales, they reached a 38-year record low in June, with firms in the retail and wholesale trades sectors reporting that relative stocks as "too low". What’s more, no improvement is expected next month.

So was there any good news? The easing of lockdown restrictions on stores and the hospitality industry, allied to the growing confidence in going out as the vaccination programme continues apace, fuelled the strongest overall sales seen since November 2016.

The CBI survey of 117 firms (including 56 retailers) conducted between 26 May and 16 June, showed UK retail sales and orders did grow at the fastest pace since August 2018 and September 2015 respectively. But this was mostly driven by grocers, which reported that sales remained above seasonal norms, alongside improvements seen in sub-sectors related to home improvements (furniture & carpets, hardware & DIY).

Generally, sales were above seasonal norms to the greatest extent since November 2016 (+23% from -3% in May). And sales are expected to remain “good” for the time of year next month (+23%).

But the latest monthly survey did stress these current indicators “are less useful for assessing current conditions as they compare sales and orders to June 2020, when activity was depressed by the national lockdown, which remained in force until the middle of that month”.

Despite the generally upbeat overview in June “after a generally gloomy 2021 so far”, Ben Jones, principal Economist at the CBI, noted retail “remains a long way from a full recovery”. 

He said: “The return of demand is patchy, with inner-city footfall still well down. The outlook is also 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. 

“Even as consumer demand returns, the legacy of lockdowns on retailers’ balance sheets remains. Many will welcome the rent moratorium extension, but more support is needed, starting with holding off on tapering existing business rate reliefs”.