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Deflationary trend helps revitalise UK fashion retail

Aug 2, 2024 United Kingdom

The UK fashion retail sector benefited from a deflationary trend in July, according to the British Retail Consortium (BRC), giving consumers a temporary respite from recent difficult months

According to the latest data from the BRC, shop price annual inflation in the UK remained unchanged at 0.2% in July, below the 3-month average rate of 0.3% and at its lowest level rate since October 2021. In particular, non-food remained in deflation at minus 0.9% in July, down from minus 1.0% in the previous and in line with the 3-month average rate of minus 0.9%. Inflation is also at its lowest rate since October 2021.

“Shop price inflation in July remained unchanged on the previous month. Non-food price deflation continued, albeit at a slower rate than June. Holiday makers could pick up bargain summer wear and summer reads as clothing and footwear prices fell for the seventh consecutive month amidst persistent weak demand, and the prices of books fell”, commented Helen Dickinson, Chief Executive of the British Retail Consortium.

Despite the temporary respite from wider economic pressures, no one is out of the woods yet. “As we cycle through high inflation comparatives from a year ago, we can expect a lower level of inflation for a number of months to come”, predicts Mike Watkins, Head of Retailer and Business Insight, NielsenIQ. However, “with the squeeze on household finances continuing, consumer confidence only slowly improving, and poor summer weather so far, retailers will still need to keep any price increases to a minimum to encourage shoppers to spend”, he concluded.

Image Credits: news.sky.com

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