Recent data reveals a slight improvement in fashion sales and shop price trends for October, indicating a potential recovery.
- Shop price deflation inched to 0.8% from the previous 0.6%, marking a continuing trend of price stabilisation.
- The fashion sector saw a moderate rise in prices for the first time since January, suggesting a shift in retail strategies.
- Non-food items remained in deflation, stabilising at -2.1%, hinting at persistent challenges in this sector.
- Food inflation eased to 1.9%, providing relief from previous higher rates, aligning closely with consumer expectations.
Recent figures have shown a small but notable improvement in fashion sales and shop price dynamics for October, potentially marking the beginning of a recovery phase. Shop price deflation showed a reduction, moving to 0.8% from 0.6% in the previous month. This trend of price stabilisation could indicate a turning point for the retail industry.
The fashion sector experienced a moderate price increase for the first time since January. This could imply that retailers are starting to adjust their strategies, moving away from last year’s aggressive discounting practices. Helen Dickinson, the BRC’s chief executive, noted, ‘With fashion sales finally turning a corner this autumn, prices edged up slightly for the first time since January as retailers started to unwind the heavy discounting seen over the past year.’
Despite positive signals in fashion sales, non-food items have remained in deflation at -2.1%, unchanged from the previous month. This consistent deflation rate, however, is still below the three-month average of -1.9%, reflecting ongoing challenges in revitalising this part of the retail market.
In contrast, food inflation decreased to 1.9%, down from 2.3% in the previous month, which is slightly above the three-month average rate of 2.1%. This easing of food inflation aligns with a broader trend of stabilising consumer prices, driven by a decrease in pressure on the food supply chain. Mike Watkins from NielsenIQ highlighted, ‘Inflation in the food supply chain continues to ease and this helped slow the upward pressure of shop price inflation in October.’
The industry continues to appeal for governmental support, with calls for the Chancellor to introduce a Retail Rates Corrector as part of the upcoming Budget. This measure would aim to lower business rates for retail properties by 20%, thereby enabling retailers to maintain competitive pricing and stimulate further economic activity. The implementation of such fiscal adjustments would also potentially safeguard jobs and encourage retail investments.
The latest data points to a possible revitalisation in fashion sales, although broader retail challenges persist.