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Clothing and footwear deflation slows, says British Retail Consortium

Prices in non-food have edged up by 0.2% in March compared to a 0.4% fall in February – the first rise for 15 months – driven by slowing deflation in categories including clothing and footwear.

The rise, which is the highest rate for 15 months, comes as overall shop price inflation rose from 1.1% in February to 1.4% last month, according to the latest figures from the British Retail Consortium.

Clothing and footwear saw a sharp decrease in its deflation rate to 2.2% in March from 4.2% in February.

Deflation in clothing and footwear peaked at a record 7.7% in January 2013.

Helen Dickinson, BRC director general, said: “Non-food prices have edged into inflationary territory for the first time in 15 months, drive by gradual growth across a number of categories rather than any one seeing substantial increase. It bears out anecdotal evidence that demand is strengthening and promotions are less widespread than last year.”

Rising global cotton prices are a concern for the category, however, with prices 16% up from the start of the year. The BRC warns that if this persists “we may see prices rise when current contracts begin to unwind”.

Dickinson also warned that April will be “one to watch” to see if the prolonged unseasonably cold weather leads to deeper discounting on spring lines.

Mike Watkins, head of retail and business insight at research firm Nielsen, added: “As discretionary spend for the next few months is expected to remain flat at best, what upward pressure there is on prices is not coming from the consumer at the moment.”

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