Retail sector stuck in mire despite store reopenings

● Latest CBI snapshot follows last week’s grim warning from north of the Border

Britain’s retailers remain pessimistic after suffering another “steep drop” in sales, according to new figures.

The latest monthly distributive trades survey by business organisation the CBI revealed that retail sales sank by 37 per cent in June, measured yearon-year. That compares with a 50 per cent decline in May before some lockdown measures were eased.

The CBI conducted its latest survey between 27 May and 12 June. It said the slight improvement represented stronger sales growth for grocers as specialist food and drink firms also saw sales stabilise.

Nevertheless, retailers said they expect sales volumes to fall at a slightly faster pace in the year to July, following the reopening of non-essential retailers.

The survey revealed an “extremely negative” forecast from retailers which have been able to reopen from 15 June south of the Border, with the vast majority of respondents expecting sales to be lower compared with July 2019.

The Uk-wide figures come just over a week since it emerged that many of Scotland’s retailers have been brought “to the brink” after sales slumped by more than a quarter last month.

Thelatestsalesmonitorfrom the Scottish Retail Consortium (SRC) and KPMG found that total sales in Scotland were down 27.6 per cent in May, compared with the same month last year, although this was an improvement on the record slide of more than 40 per cent recorded in April – the first full month of lockdown.

Total food sales increased by 3.6 per cent for May 2020 compared to 12 months ago, with grocery retailers reporting a higher basket spend than before the Covid-19 crisis. But there was a 53.2 per cent plunge in total non-food sales. Non-essential Scottish retailers are set to open on Monday.

Ewan Macdonald Russell, head of policy and external affairs at the SRC, said: “While the figures were an improvement on April’s record low, restrictions on trading are bringing many retailers to the brink.”

Meanwhile, yesterday’s CBI survey showed that growth in internet sales volumes picked up to a rate above the longterm average, with online sales rising at the fastest pace since October 2018.

The volume of orders placed with suppliers fell at a slower rate in the year to June and is expected to fall at a similar rate next month, the CBI added.

Rain Newton-smith, chief economist at the business body, said: “With high street shops, department stores and shopping centres reopening across England last week amid some scenes of long queues, you’d be forgiven for thinking retailers’ difficulties are coming to an end. But the health of the retail sector remains in the balance.

“Despite retailers working flat out to make sure they are safe and ready to open their doors, outside the grocery sector most retailers expect sales to be far below where they were this time last year.”