British retailers reported only a slight slowdown in July after sales growth hit its highest in almost three years in June, the first full month after non-essential shops reopened from a coronavirus shutdown, industry data showed on Tuesday.
The Confederation of British Industry's measure of the volume of sales compared with a year earlier dipped to +23 from June's +25, which was the highest since August 2018.
Economists polled by Reuters had mostly expected a bigger fall to +21.
The CBI said the growth in orders was the fastest since December 2010 and the pace of sales was expected to pick up again in August.
However, sales were reported as in line with usual levels for the time of year, excluding the effect of Britain's coronavirus lockdown.
In June of this year, the CBI's measure of the volume of sales rose to +25 from May's +18, the highest since August 2018, while sales were reported as above seasonal norms.
Consumer Demand
CBI economist Ben Jones said consumer demand was supporting Britain's economic recovery, although clothing and footwear stores in particular had yet to see demand recover.
"While demand may be more stable, operational issues worsen," he said.
"Relative stock levels are at a record low and expected to fall further still, while the number one worry for many firms at the minute is labour shortages throughout the supply chain as staff self-isolate."
The Bank of England is keeping a close eye on how much Britons spend from savings Britons build up during the lockdown, which could prove a key driver of the country's recovery from the COVID-19 pandemic.
It is also looking at whether bottlenecks in supply caused by the pandemic - such as dwindling stocks in the retail sector - will lead to longer-term inflation pressures.
Read More: COVID-19 Has Revealed That Global Supply Chains Are A House Of Cards: Analysis
Recent data from the Office for National Statistics revealed that British retail sales resumed their post-lockdown recovery in June after a surprise fall in May, as soccer fans watching the Euro 2020 tournament loaded up on food and drink to enjoy at home.
