In October, fashion sales showed signs of recovery after a period of decline, as highlighted by new data released recently.
- The BRC-NielsenIQ Shop Price Index reported a decrease in shop price deflation to 0.8%, down from 0.6% in September.
- Non-food items maintained a deflation rate of -2.1%, consistent with the previous month, while food inflation reduced to 1.9%.
- The BRC urged the Chancellor to adjust business rates to support ongoing retail price control and investment.
- Retailers face ongoing challenges with consumer spending patterns, amid easing inflation in the food supply chain.
In October, fashion sales began to improve following a period of extended discounting throughout the past year. The BRC-NielsenIQ Shop Price Index indicated a shop price deflation of 0.8% for the month of October, which is a slight reduction from the previous month’s figure of 0.6%. Despite this positive turn, annual shop price growth hit its lowest rate since August 2021.
Non-food items remained in a deflation cycle, maintaining a rate of -2.1% from the previous month, which is below the three-month average of -1.9%. On the other hand, food inflation decreased to 1.9%, down from September’s 2.3%, still above the average of 2.1% over three months. This data reflects the nuanced dynamics within different retail sectors.
Helen Dickinson, CEO of the British Retail Consortium, stated that October marked the third consecutive month of falling shop prices, suggesting a shift away from deep discounts as autumn approaches. Slight price increases since January indicate retailers are adjusting to market demands and consumer behaviour.
The BRC has called on the Chancellor of the Exchequer to address business tax rates, advocating for a ‘Retail Rates Corrector’ to reduce rates by 20% across retail properties. Such measures would help retailers manage prices, enhance job security, and encourage investment in the sector.
Mike Watkins from NielsenIQ commented on the easing of food supply chain inflation, which has helped mitigate some shop price pressures. However, he noted that other cost factors remain significant, affecting consumer confidence and spending decisions as holiday promotions begin.
Retailers are navigating competitive landscapes during key spending periods like the Christmas season, which is heightening competitive dynamics within both food and non-food categories.
October signifies a pivotal shift in fashion sales as the sector adapts to changing consumer spending habits and economic pressures.
