Shop price inflation stayed as shop price deflation in February with the latest figures from the British Retail consortium showing prices fell 0.7% year on year last month. That was the same dip as it had reported in January.
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And for non-food products, the fall in the BRC-NIQ Shop Price Index was even more marked at 2.1%, a bigger drop than the 1.8% deficit seen in January.
The overall figure was skewed by the fact that food prices continued to rise, edging up by 2.1% in February compared to just a 1.6% increase in January.
And while food prices may not seem directly linked to fashion retailers and brands, the fact is that with prices for necessities still rising, consumer are more likely to cut back on discretionary items and fashion is frequently cited as the products they’ll leave on the store rails when money is tight.
That’s a key reason why non-food prices continue to fall with BRC chief executive Helen Dickinson saying that “discounting is still widespread in fashion as retailers tried to entice customers against a backdrop of weak demand”.
She expects inflation to rise across the board as the year progresses “with geopolitical tensions running high and the imminent £7 billion increase in costs from the Autumn Budget and the new packaging levy arriving on the doorsteps of retailers”.
The BRC expects food prices to be up by 4%+ by the second half of the year, and while Dickinson didn’t give a prediction for non-food prices, chances are that even more discounts will be required.
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said: “With many household bills increasing over the next few weeks, shoppers will be looking carefully at their discretionary spend and this may help keep prices lower at non-food retailers.”
