UK clothing prices continued to fall in August

UK clothing prices continued to fall in August

Shop price deflation at UK clothing and footwear retailers continued at a double-digit rate in August, albeit decelerating from July.

According to the latest Shop Price Index from the British Retail Consortium (BRC) and Nielsen, clothing and footwear prices declined 10.2% year-on-year in August, slowing from the 11.2% fall in July.

All sub-categories experienced deflation in July, with children's, women's clothing and other clothing more deflationary than the category average. The lowest cotton price since 2009 is good news for retailers and consumers alike, the BRC said.

On a month-on-month basis, clothing and footwear prices edged up 0.6% after a 1% drop in July.

Meanwhile, overall UK shop prices recorded deflation for the 16th consecutive month, decelerating to 1.6% in August from 1.9% in July, but remaining deeper than the 12-month average rate of 1.2%.

Non-food reported a deceleration in deflation with a figure of -2.9%, compared to -3.3% in July.

"Many non-food retailers will have looked to keep prices stable as end of season ranges sell through," said Mike Watkins, head of retailer and business insight at Nielsen.

He added: "With the trading environment still challenging, all retailers will now be keen to keep prices as competitive as possible to encourage consumers back into store after the summer holidays."

Shore Capital Stockbrokers analyst Clive Black noted: "Clothing and footwear retailers tend to have much more stock specific credentials but the overall market is deemed reasonably favourable to our minds."