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Clothing and footwear prices fall 6.4% as December discounting bites

Clothing and footwear prices declined by 6.4% year on year in December 2015, as more retailers discounted in the run-up to Christmas.

This was the highest drop of all the non-food categories, which include furniture, electricals, DIY, books, home entertainment and beauty, according to the BRC-Nielsen Shop Price Index.

On a month-on-month basis, clothing and footwear prices were down 0.4% on November.

Women’s, men’s and kids’ clothing reported accelerations in their deflation rates, while clothing accessories fared slightly better. Prices for babywear returned to inflation after four months in negative territory.

Total non-food prices were down 3% year on year in December. On a month-on-month basis non-food prices prices rose 0.1%.

Overall, shop prices including all food and non-food categories fell by 2% year on year.

BRC chief executive Helen Dickinson said: “Prices in Britain’s shops have continued to tumble, this month by 2%. For the last two years and eight months, customers have been able to fill their baskets, whether virtual or physical, and pay less for their goods than the year before.

“With retailers continuing to invest in price, relatively low commodity prices and intense competition a hallmark of the industry, we can expect falling prices to continue in the medium term.

“Although trading statements are starting to filter through, we will have to wait until next week to learn if the lower priced goods have translated into positive sales for the market as a whole during the all-important Christmas trading period.”

Mike Watkins, head of retailer and business insight for Nielsen, said: “We can expect the current levels of deflation across the retail industry to continue for the first half of 2016.

“After the unseasonably mild autumn and early winter, many non-food retailers will use price cuts and targeted promotions early in the year, to help sell through and to benefit from any rise in real wages.”

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