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February 2, 2022

Inflation in UK clothing stores spike as supply costs rise

An increase in costs across the supply chain is burdening clothing retailers with the British Retail Consortium warning it is going to be impossible to protect consumers from product price rises.

By Laura Husband

The British Retail Consortium says it is going to be impossible to protect consumers from product price rises in future with commodity prices, energy prices and transportation costs continuing to rise and fuelling inflation across retail stores, including clothing sellers.

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  • What is the current inflation situation in the UK?
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  • Which industry sectors are most vulnerable to reduced consumer demand?
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  • How can your company survive and thrive in a high inflation environment?
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by GD50 Custom
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Inflation in non-food retail stores, which includes clothing, accelerated to 0.9% in January compared to a fall of 0.2% in December according to data from the British Retail Consortium (BRC), a faster rate of growth than the 12-month and six-month average price changes of -1.3% and -0.4%, respectively.

The data published by UK retail trade body, BRC, and market research company NielsenIQ, shows that UK shop price inflation in January 2022 is above the 12-month average decrease of 0.6 and six-month average price rise of 0.1% and marks the highest rate of inflation since December 2012.

BRC chief executive Helen Dickinson points out: “January saw shop price inflation nearly double, driven by a sharp rise in non-food inflation.”

She explains the rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda. Many households will find it difficult to absorb the additional costs, as well as others on the horizon.

With supply costs on the up it is inevitable that retail prices will continue to follow in the future, she adds

While, NielsenIQ head of retailer and business insight Mike Watkins adds: “The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumer’s willingness to spend.”

He explains that NielsenIQ research shows nearly a half of all households are saying their most important concern at the moment is the rising cost of living. This will mean stores will need to encourage cash-strapped customers to keep shopping and despite the increase in shop prices, retailers are responding by keeping price increases as low possible for as long as possible.”

Inflation is also having a major effect in the US with The American Apparel & Footwear Association urging Biden to tackle rising apparel inflation rates before Christmas following the news the US Consumer Price Index had increased to a 40-year high of 6.8%.

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Free Whitepaper
img

What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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