Growth in UK retail sales volumes unexpectedly accelerates in June - CBI

The Confederation of British Industry (CBI) reported on Tuesday its latest survey of retailers showed retail sales volume balance rose to +25 in the year to June from +18 in May, being above seasonal norms. This was the highest reading since August 2018.

Economists had forecast the reading to ease to +14.

The report also revealed that the retail orders' balance grew at the quickest pace since September 2015.

In other survey results, overall sales were above seasonal norms to the greatest extent since November 2016 (+23 from -3 in May). Sales were forecast to remain good for the time of year next month (+23).

Meanwhile, the volume of stocks in relation to expected sales reached a record low in June (-19 from -6, question first asked in 1983), with all three main sectors -retail, wholesale and motor trades - reporting stocks as too low. Relative stock levels were seen to remain low next month as well (-22).

“After a generally gloomy 2021 so far, the sun finally shone for retailers in June, with seasonal sales volumes the strongest since November 2016. This was the latest sign that the success of the vaccination programme is feeding through to stronger consumer confidence which, along with the re-opening of hospitality, is encouraging shoppers back onto the streets,” noted Ben Jones, Principal Economist at the CBI. “But the sector remains a long way from a full recovery. The return of demand is patchy, with inner-city footfall still well down. The outlook is also clouded somewhat by supply pressures, with stocks seen as too low compared with expected sales, as logistical and capacity challenges continue to hamper global activity.”