UK retail stocks slump to record low - CBI

UK retail sales rose strongly in July but stocks fell to a record low and are set to dip further amid supply problems, a CBI survey showed.

Sales rose at a rate well above the long-run average in the year to July and orders grew at their fastest pace since December 2010 as the economy picked up, the business lobby group said. Sales are expected to grow again in August with order growth slowing slightly.

Across the distribution sector, stock levels compared with expected sales reached a survey low for the second month running. Retail, wholesale and motor sectors all reported stocks as too low. Store shelves have been left thinly stocked with Brexit and the pandemic combining to create a shortage of lorry drivers and some goods.

Ben Jones, the CBI's principal economist, said: “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."

Jones said businesses would face further major disruption unless the government implements a better system for double-jabbed employees to continue working.

The survey of 124 firms including 51 retailers was conducted between 25 June and 15 July 2021 as the economy prepared for the near-full unlocking of the economy on 19 July. Stocks were at their lowest level compared with expected sales since the question was first asked in 1983.