The recent CBI survey shows that sales of retailers have risen by 32%, showing a healthy position for the sector in July, compared to last year. This comes from the summer heatwave and World Cup, which helped boost the high street spending. Kantar Worldpanel report how supermarkets sold a record amount of alcohol in the weeks of the World Cup, when England became victorious against Sweden and Columbia, translated into £387m worth of sales.
However, the CBI have said that orders being placed on suppliers has fallen, suggesting that the continued growth and sales will not last. Online sales also slowed. The outlook for August is therefore ‘’less upbeat’’ – as retailers are expecting.
In particular, retail sub-sectors, footwear and leather, recreational goods and department stores were the best performers with the highest sales volume growth, compared to clothing, furniture and carpets, who saw sales fall.
CBI principal economist, Alpesh Paleja, remarks: ‘’While the heatwave has boosted retail sales in recent months, we may be seeing some early signs of a cooling off, with orders falling in the year to July and retailers expecting no growth in sales next month’’.
The challenges facing the retail sector are not forgotten, with low real wage growth, rising business rates, political uncertainty and online competition being threats.
Perhaps this is why there has been a rise of retailers reporting job cuts and going into CVAs – could we see a further rise of this in the predicted slower growth in the upcoming month of August.