LONDON - 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 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.

"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.

The retail sector has been hit hard by the COVID-19 pandemic, spurring a wave of layoffs.

"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.

(Reporting by Andy Bruce, editing by David Milliken) ((andy.bruce@thomsonreuters.com; +442075423484; Reuters Messaging: andy.bruce.thomsonreuters.com@reuters.net))