Clothing prices continue to shrink as retailers battle intense competition
today Aug 29, 2019
Non-food shop prices fell again in August as weak consumer spending and intense competition continued to put pressure on clothing, furniture, DIY, electricals and other non-food retailers.
According to new data from the British Retail Consortium, non-food prices fell by 1.5% this month, compared to a 1.2% decline in July. This is below the 12- and 6-month average price declines of 0.6 and 0.7%, respectively and it is the fastest rate of decline since June 2018.
And prices for five categories, including clothing, were below their August 2015 prices.
Overall prices (which include food and non-food goods) also fell in August, down by 0.4% compared to a 0.1% decrease in July.
“Consumers were the real winners this month as prices fell at their fastest rate in over a year. Prices of non-food goods fell at a faster rate than both the previous month and the 12-month average, while food inflation eased slightly due to higher levels of discounting from supermarkets,” said Helen Dickinson, chief executive of the British Retail Consortium.
Mike Watkins, head of retailer and business insight at Nielsen, added: “August is often a difficult month for retailers made more challenging this year by unseasonable weather early in the month, and we have seen the return of vouchering by many supermarkets and some non-food retailers bringing forward end of season discounts to help drive sales.”
Over the past year, UK consumers have taken a cautious approach to shopping, particularly non-discretionary items, as uncertainty surrounding Brexit continues to erode consumer confidence.
This, coupled with a rise in online shopping, has led many retailers to offer more discounts to attract shoppers back into their stores.
But the British Retail Consortium has warned that a no-deal Brexit might affect retailers’ ability to offer low prices, as it would raise the cost of imported goods.
Helen Dickison of the BRC said: “In the interests of both consumers and retailers, the Government must redouble its efforts to find a workable agreement with the EU that would avoid a no deal scenario.”
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