Retailers gloomy after steep sales drop - CBI
Retailers reported another steep drop in sales in June and remained pessimistic about the near-term outlook with reopened shops expecting poor sales, a Confederation of British Industry survey showed.
Sales fell sharply in the year to June as the CBI's survey recorded a balance of -37% though the decline was slower than the -50% a month earlier because of stronger growth for grocers. The balance is the difference between respondents reporting an increase and a decrease.
Many retailers have reopened after the government eased restrictions on non-essential trading from 15 June but sales expectations are low for most subsectors, the CBI found. Sales are poor for the time of year and are expected to remain so, the survey found. The pace of decline is expected to increase in July with a balance of -48%.
Lack of demand was the biggest concern for retailers reopening at 62% followed by employee absences because of school closures at 61%. The survey reflects wider concerns that the economy will recover slowly from the Covid-19 lockdown with households worried about unemployment and further disruption from a possible second wave of infections.
Rain Newton-Smith, the CBI's chief economist, said: “With high street shops, department stores and shopping centres re-opening 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."
The CBI's distributive trades survey interviewed 174 retailer and wholesalers between 27 May and 12 June, including 71 retailers.