Value fashion chains Primark and New Look have put prices up by about 4% this season, according to an exclusive survey carried out for Drapers by market research firm Compability.
Prices at department store chain Debenhams also showed a 3% increase on last year when assessing an average shopper’s basket, while multiples Marks & Spencer and Next have also put prices up by 2%.
The price hikes spell the end of the deflationary era in fashion and have arisen because of the need to protect margins in the face of increased discounting to tempt shoppers into spending, on top of issues surrounding the weakness of the sterling against the dollar and euro which is affecting stock prices.
Prices are likely to creep up further as the sector moves into the autumn 09 season, when many favourable hedging terms expire. As Drapers went to press the dollar was 1.38 and the euro was 0.93 against the pound, pushing up buying prices from the Far East and Eastern Europe for retailers.
Debenhams deputy chief executive Michael Sharp said: “There could be price increases of up to 5% to 10% on the high street. We are hedged more than most retailers, but we will stay focused on cash margin, so if we can drive more volume by being competitively priced then we will do that.”
New Look chief executive Phil Wrigley addressed the issue of high street price rises at a conference held by Drapers’ sister title Retail Week. “You have to share the burden with consumers and suppliers. The trick is to do that as little as you can and add as much value as possible,” he said.
The research, which covered 141 products across seven retailers, showed little discernible pattern on price rises. The average basket included blouses, trousers and jackets, underwear, jeans, dresses and skirts.
Compability research and audit manager Stephen Clarkson said a trend was emerging: “Across this many products and retailers, this small change is significant and may be due to two things. First, some currency devaluation, and second, margin growth. Most firms will have planned level or declining sales for 2009, but many chief executives will want to recover some of the loss by getting more margin.”