The price of clothing continues to fall as many retailers keep promotions in place to entice consumer spend, the British Retail Consortium has said as shop price annual inflation eased to 2.5% in February.
Latest figures form the BRC show shop price annual growth is at its lowest since March 2022. Food inflation decelerated to 5.0% in February, down from 6.1% in January – the tenth consecutive deceleration in the food category.
Non-Food inflation was unchanged at 1.3% in February, but this remains below the three-month average rate of 2.0%, and its lowest level since January 2022.
“There was good news for consumers as shop price inflation fell to its lowest rate in nearly two years,” noted Helen Dickinson, chief executive of the BRC.
“Food prices fell month-on-month with drops in fresh food including meat, fish and fruit. This was driven by easing input costs for energy and fertiliser while retailers competed fiercely to keep prices down.
“In non-food, inflation for furniture, electricals, and health & beauty products rose, but the price of clothing continued to fall as many retailers kept promotions in place to entice consumer spend.”
The BRC also credited easing supply chain pressures for the drop, but stressed that “significant uncertainties remain as geopolitical tensions rise”. With many shipping routes diverting via the Cape of Good Hope, due to the on-going crisis in the Red Sea, retailers could also face increasing costs.
Dickinson also warned that UK retailers “face a major rise to their business rates bills in April, determined by last September’s sky-high inflation rate”. The BRC again called for the Chancellor to use the Spring Budget to make a correction, which would “support business investment and help to drive down prices for consumers”.
The news comes as the Consumer Confidence Index fell to -21 in February, with shoppers concerned about continued high inflation and the news of a recession. Mike Watkins, head of retailer and business insight at NielsenIQ advised that for high street retailers faced with weaker demand “keeping prices stable over the next few months will be key to encourage customers to spend”.
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