UK retailers warn of stockouts until fall

UK retailers warn of stockouts until fall

Retailers have warned they could struggle to keep up with demand and fill shelves until the fall after months of supply lockdowns plunged July inventory levels to record highs for a second consecutive month.

The CBI said its monthly survey of large companies in the retail and wholesale sectors found that a spending spree on Britain’s main streets this month had stretched their capacity to stock up on vital supplies.

Retail sales grew at a rate well above the long-term average during the year through July, according to the CBI, while orders grew at the fastest pace since December 2010. Sales and orders are expected to continue growing at a strong pace next month.

However, the survey of 124 companies, including 51 retailers – conducted between June 25 and July 15 – found that inventory levels relative to expected sales in the retail sector reached the lowest point since 1983 for the second consecutive month.

Thousands of companies have reported supply difficulties following disruptions at UK ports due to Brexit, paperwork and Covid-19 restrictions. Labor shortages due to ‘pingdemia’ demands for staff to self-isolate after coming into contact with someone who tests positive for Covid-19, particularly among road hauliers and delivery drivers , have also blocked supplies to warehouses and stores.

“The retail, wholesale and auto trade sectors all reported relative inventories that were too low, with the situation expected to deteriorate further in August,” the report said.

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According to a review of responses from retailers, sales rose 23% in July, down slightly from 25% in June. Orders grew at the fastest pace since December 2010, up 49% from + 30% in June. The balance is the weighted difference between the percentage of retailers reporting an increase and those reporting a decrease.

The CBI said internet sales, which soared during the pandemic, stagnated after the growth rate fell 21% in June, falling to the lowest on record in July of just 2%. Analysts expected online sales growth to slow as people return to high street stores after the lockdown.

Ben Jones, senior economist at the CBI, said: “While demand may be more stable, operational issues are getting worse. Relative inventory levels are at an all time high and are expected to decline further, while the main concern for many companies today is the shortage of labor throughout the supply chain as personnel self-isolates. “


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