October marked a pivotal change as fashion sales began to recover amidst ongoing market deflation.
- Shop price deflation reached 0.8% in October, an improvement from September’s 0.6%.
- The annual shop price growth rate fell to its lowest since August 2021, highlighting broader economic trends.
- Non-food item deflation remained consistent at -2.1% in October, with a slight uptick from the previous month.
- Food inflation eased to 1.9% in October, aligning closely with the three-month average rate.
In October, the fashion sector witnessed a notable shift, with sales showing signs of recovery amidst deflationary pressures. The latest data from the BRC-NielsenIQ Shop Price Index indicated that shop price deflation reached 0.8%, a subtle change from the previous month’s 0.6%. This marks the third consecutive month of falling shop prices, hinting at an evolving economic landscape.
Despite this deflation, the annual growth rate for shop prices dropped to its lowest point since August 2021. This trend points to wider economic patterns affecting pricing strategies across the retail industry.
While non-food items maintained a deflation rate of -2.1% in October, unchanged from September, it was still below the three-month average rate of -1.9%. This signals a slight improvement but suggests ongoing challenges in this sector.
Food inflation experienced a deceleration, dropping to 1.9% in October from September’s 2.3%, aligning more closely with the three-month average rate of 2.1%. This reduction in food inflation reflects a moderation of pressures within the food supply chain.
Helen Dickinson, BRC’s chief executive, mentioned that the marginal fall in shop prices for the third month and the subtle increase in fashion prices for the first time since January indicate a necessary adjustment, possibly as a response to the prior year’s excessive discounting.
The BRC urged governmental intervention to maintain low consumer prices. Dickinson highlighted the disproportionate tax burden on the retail sector. She called for a ‘Retail Rates Corrector’—a proposed 20% reduction in retail property business rates—to support continued consumer affordability, job security, and retail investment.
Mike Watkins, from NielsenIQ, pointed out the complex situation facing consumers. Despite easing food chain inflation contributing to lessened shop price inflation, other cost pressures persist. Watkins noted the looming competitive battleground for consumer spending, especially with the approach of holiday promotions.
The shift in fashion sales, amidst subtle economic changes, underscores the evolving retail landscape.
