The prices of clothing and footwear have decreased for the seventh successive month, signalling continued deflation in the market.
- Shop price annual inflation remained constant at 0.2% in July, marking its lowest rate since October 2021.
- Non-food prices continued to deflate, although at a slower pace, with a rate of -0.9% in July, slightly up from June.
- BRC chief Helen Dickinson attributes the price fall to persistent weak demand, especially benefiting holiday shoppers.
- Uncertainty about future inflation persists due to factors like climate change and global tensions.
Shop price annual inflation held steady at 0.2% in July, the lowest recorded rate since October 2021, according to the British Retail Consortium (BRC). This rate is also below the three-month average of 0.3%, indicating a stabilising trend in inflationary pressures.
The BRC-NielsenIQ Shop Price Index highlighted that non-food prices remained in deflation, coming in at -0.9% for July. Although this was a slight increase from the previous month’s rate of -1%, it underscores a continued trend of deflation outside of the food sector.
Helen Dickinson, Chief Executive of the BRC, commented on the situation, stating that “persistent weak demand” has played a significant role in reducing clothing and footwear prices. She noted that shoppers, particularly those heading on holiday, could find bargains in summer wear due to these falling prices.
Despite the easing of inflation, concerns remain regarding future inflationary pressures. The unpredictability of climate change impacts on both domestic and global harvests, coupled with rising geopolitical tensions, suggests that renewed inflation could be a possibility in the near future.
Continued deflation in clothing and footwear prices suggests persistent weak demand, with potential for future inflation due to global uncertainties.
