On the heels of news that BHS has entered administration, the bad news keeps pouring down on Britain’s retail sector, as footwear and apparel prices continued to deflate for the third year running.
The British Retail Consortium (BRC) has reported that overall shop prices deflated 1.7% in April, unchanged from the decline seen in March and in-line with the 12-month average. Clothing and footwear prices fell 7.1% year on year in April, highlighting the level of discounting on the high street in the run-up to summer.
“This month marks an important anniversary for retailers and shoppers alike. We’ve seen three years of falling shop prices, with prices falling by 1.7% in April compared to a year earlier,” said Helen Dickinson, chief executive of BRC.
The BRC reported that April marked the thirty-sixth consecutive month of falling prices, largely driven by intense competition across the industry, as retailers slash prices to undercut rivals. Dickinson said that while price cutting has helped shoppers and kept inflation and interest rates low to the benefit of the UK economy, it has negative long-term implications on margins and profitability, given the combination of continued investment in digital and rising cost pressures.
“Hopefully today’s anniversary of falling prices will be a strong remedy to consumer confidence which has weakened significantly since the beginning of the year,” she said.
At the top of the year, BRC said it expects prices to continue to deflate for the rest of 2016.