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Clothing deflation slows as Sales fall off

Deflation for clothing and footwear slowed from 2.5% in June to 1.9% in July as the level of summer promotions eased and the sector witnessed deflationary pressure from kidswear, menswear and womenswear.

Non-food inflation remained static in July staying at 1.3%, according to figures from the British Retail Consortium (BRC). Compared to last year clothing and footwear prices dropped by 1.9%, whereas in the previous month they showed a drop of 2.5%.

The deceleration in deflation was due to a slower fall menswear and womenswear coupled with rising inflation for babywear. Downward pressure came from kidswear, moving into deflationary territory for the first time since August last year.

The level of summer promotions and discounts fell off on July after starting earlier than usual. Pressure from cotton prices has also eased over the last month and fell by 35% in July.

The BRC said this is welcome news for retailers struggling to maintain margins, however the rising prices from suppliers and manufacturers , particularly from China, will cause continued inflationary pressure in the coming months.

Prices for clothing and footwear in July saw a fall of 1.6% month on month after a small rise of 0.1% in June.

BRC director general Stephen Robertson said: “High world commodity costs and import inflation resulting from rising prices in China are still the key factors behind shop price rises. Non-food inflation was virtually unchanged from June but is still remarkably low, especially since these figures include the effect of the VAT rise.”  

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