UK clothing, footwear store growth still lags in July

UK retail sales continued to grow at a rate well above the long-run average in the year to July, but clothing and footwear stores are yet to see demand recover to usual levels, the CBI’s latest Distributive Trades Survey has showed.

Retail sales grew in the year to July at a similar pace as last month (+23% from +25%). And although retailers could only view July sales as “average” for the time of year, at least they’re expected to continue growing at a robust pace next month (+29%).

Meanwhile online sales continue to struggle to achieve growth. They were flat in the year to July, with growth slowing for the fifth consecutive month, as physical retail reopened. At least retailers expect internet sales to pick up next month, but growth is expected to remain well below the long-run average.

And while overall July orders grew at the fastest pace since December 2010 (+49% from +30%), orders growth is expected to slow marginally (+39%) next month.

The survey of 124 firms, including 51 retailers was conducted between 25 June and 15 July and 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.

Ben Jones, principal economist at the CBI, said: “Consumer demand continues to support the UK’s economic recovery. Retail sales have been at or above seasonal norms for the last four months now, although this picture is not universal”.

But he added: “While demand may be more stable, operational issues worsen. 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”.

UK clothing, footwear store growth still lags in July - CBI survey

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