High Street retailers staggered back into growth in July but face a long uphill battle to return to their pre-coronavirus normal, news figures revealed today.
Sales for the year to July were up by just 4 per cent as shoppers returned, according to a closely watched survey from the Confederation of British Industry (CBI).
The rise, up from -37 per cent in June, was mainly driven by grocery and DIY sales, while cards, flowers and stationery sales also returned to growth.
However, the High Street fashion industry is still feeling the pinch, with clothing, footwear and department stores continuing to report big falls – albeit slightly less stark than in recent months.
CBI chief economist Rain Newton-Smith said: ‘It’s great to see retail sales stabilise this month, but this doesn’t tell the whole story.
‘This crisis has created winners and losers within the retail sector, and for some businesses the picture remains bleak.
‘The reopening of non-essential retail was a vital step towards recovery but isn’t a cure-all.
‘The Government has provided critical support for firms and jobs throughout the crisis.
‘But ongoing financial pressures are a major challenge for some retailers, and additional direct support to shore up cash flow, such as extension of business rates relief, should be considered.’
It came as Selfridge’s became the latest retailer to announce job cuts.
It has told staff it plans to cut 450 posts, warning annual sales are expected to be ‘significantly less’ than last year due to the pandemic.
Sales for the year to July were up by just 4 per cent as shoppers returned, according to a closely watched survey from the Confederation of British Industry (CBI)
It came as Selfridges became the latest retailer to announce job cuts. It has told staff it plans to cut 450 posts, warning annual sales are expected to be ‘significantly less’ than last year due to the pandemic
The upmarket retailer said it will reduce its total headcount by 14 per cent to cope with the impact of the virus and subsequent lockdown.
In a message to staff, group managing director Anne Pitcher warned the recovery will be ‘slow’, stressing 2020 will be ‘the toughest year we have experienced in our recent history’.
She said: ‘As you would expect at such a critical time, we have been carefully examining every aspect of our business – our structures, our costs, our ways of working – from top to bottom, leaving no stone unturned to ensure we are fit for purpose and the future.
‘This has involved reviewing all non-essential expenses as well as pausing projects and initiatives where prudent to do so.
‘The task ahead is significant and, as we look to reinvent retail and prepare to build back, we will need to go further.’
She added: ‘As a family business, the hardest decisions are the ones that affect our people, which is why it pains me to share news today of the toughest decision we have ever had to take that we will, very regrettably, need to make a 14% net reduction in our overall headcount, approximately 450 roles.’
The survey was gathered between June 26 and July 15 and 133 businesses responded.
Just under half of these were retailers, 55 were wholesalers and 16 were motor traders, the CBI said.
Wholesalers reported a fourth straight month of declining orders and sales, though the pace slowed somewhat.
Motor traders said their sales had grown in the year to July, but they expect to return to below zero again next month.
Retail sales account for less than a fifth of overall household spending. Other sectors, such as bars and restaurants, have reported subdued demand since reopening in England on July 4.
Only three out of nine retail sectors reported on by the CBI showed year-on-year growth in July though most categories of store reported an improvement from June.
Official figures for June showed clothing and footwear sales were a third lower than a year before. Food sales were 6 per cent higher and non-store sales – mostly online – rose 55 per cent.
Labour shadow business secretary Ed Miliband said: ‘While it’s welcome that retail sales figures are up, we cannot be complacent with many parts of the sector still struggling.
‘These figures reinforce the cause for concern for many non-food retailers including clothing, furniture and shoe shops.
‘The UK is facing the biggest recession in 300 years and we are seeing a wave of redundancies.
‘High streets are the backbone of communities across the country, and their continued vitality is absolutely essential to local economies and livelihoods.
‘If the Government is serious about protecting the high street, they should back up their words with deeds.
‘Labour is calling on ministers to put in place a new £1.7 billion fightback fund, which will give local communities the flexibility to support their local businesses.’