By Andy Bruce
LONDON, July 28 (Reuters) - A gauge of British retail sales surged in July to its highest level in over a year as more of the economy reopened following the coronavirus lockdown, driven mostly by grocery sales, a survey showed on Tuesday.
The Confederation of British Industry's (CBI) monthly retail sales balance rose to +4 from -37 in June, its highest since April 2019 but still signalling only modest year-on-year growth in sales.
The survey chimed with other retail indicators showing a rebound is underway. Official data last week showed retail sales volumes neared pre-coronavirus lockdown levels in June when non-essential stores in England reopened.
"It's great to see retail sales stabilise this month, but this doesn't tell the whole story," said CBI chief economist Rain Newton-Smith.
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 - groceries, hardware and DIY, and 'other normal goods' - though most categories of store reported an improvement from June.
The retail sector has been hit hard by the COVID-19 pandemic, spurring layoffs including announcements by high street chains such as Selfridges, Boots WBA.O, Marks & Spencer MKS.L and John Lewis [RIC:RIC:JLPLC.UL] this month.
Official figures for June showed clothing and footwear sales were a third lower than a year before. Food sales were 6% higher and non-store sales - mostly online - rose 55%.
"This crisis has created winners and losers within the retail sector and for some businesses the picture remains bleak," Newton-Smith said.
The survey of 61 retail chains showed they expect a slightly weaker performance in August.
"There is considerable uncertainty as to just how willing consumers will be to spend over the coming months," said Howard Archer, economist for EY ITEM Club.
(Reporting by Andy Bruce, editing by David Milliken and Timothy Heritage)