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Clothing prices set for 12% jump

The price is clothing is set to rise 12% by 2014, countering the price deflation that has blighted the sector for most of the previous decade.

Prices will jump by 4% this year, and will then be subject to more modest rises every year until at least 2014, according to research by retail consultancy Verdict.

By contrast, clothing prices fell 32% between 1998 and 2008, partly driven by the rapid growth of value retailers such as Primark.

They edged up slightly when the recession hit in 2009, but only by 0.3% because retailers were fearful of passing on price hikes to consumers.

Verdict consulting director Neil Saunders said: “The consumer has had it good for the past ten years but the good times have now come to an end. Prices can’t defy gravity forever and many retailers now have very little choice but to ease up prices.”

The predicted price hikes are attributed to rising input and supply chain costs, the January increase in VAT to 20%, and an effort to rebuild and protect profit margins.

Saunders added that consumers are likely to buy less and to think more carefully about the purchases they make as a result.

“The new model is much more about adding value and providing clothing that is aspirational or different,” he said.

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