Overall inflation sustained its biggest monthly increase in two and a half years in December, driven by higher costs for housing, gasoline and medical services. Food remained flat and apparel prices fell slightly.
According to Consumer Price Index (CPI) data released last week by the U.S. Department of Commerce, prices for all goods and services rose by 2.1% (adjusted for seasonality) compared to the same month last year, with the core rate of inflation, which excludes food and energy price moves, rising 2.2%.
The index for apparel and footwear, however, decreased by 0.1%. Apparel prices (excluding footwear) dropped by 0.6% compared to December 2015. Footwear prices rose by 1.4%.
Merchants relied even more heavily on price promotions, couponing, “special purchases” and off-price strategies to stimulate consumer purchasing this year than last.
Womenswear prices increased by 0.3% in the month, while menswear prices fell 3.2%.
Children’s apparel suffered a 2.5% price decline, driven by downward pressure on boys’ and infant’s apparel prices.
Government consumer price indices are based on ticketed and sale prices of products, but do not take into account the impact of discounts applied to entire orders, loyalty point redemption, bundled merchandise discounts or other promotions. Given the increased use of these tactics by retailers, it is safe to say that official CPI data are, if anything, an understatement of the widespread price erosion within the apparel sector.
Print PDFPrint PDFWhen times are tough, companies are more willing to test new ideas and Target, Warby Parker and Amazon are pushing the boundaries of traditional retail. Target gets in bed with Casper After failed attempts at an acquisition, Target has instead invested in Casper...Read more
J.Crew has been shifting in its seat trying to adjust to a new normal of shrinking sales and growing debt, but nothing has quite yet paid off, so the company is cutting its prices.Read more
It’s official. Coach, Inc. is snapping up shares of handbag brand Kate Spade.Read more
This week, consumers called for better children's apparel, retailers turned internally to remedy their financial woes and apparel incubators improved China's manufacturing sector.Read more
Whether and how much consumers care about sustainability may be an ongoing question the industry wants an answer for, but one thing that’s clear is that though some consumers do care, sustainability isn’t the first thing they think of.Read more
Gymboree tapped former Tilly's executive Daniel Griesemer as its new CEO, JC Penney appointed Marci Grebstein as its new EVP and Wolford creative director Grit Seymour is leaving the company.Read more
Aiming to clear up potential conflicts with state laws, the Reinforcing American-Made Products Act now moves to the full Senate for consideration after the chamber’s Commerce Committee gave approval to the measure.Read more