Women’s Apparel Price Deflation Challenged Retail Sector in December

Overall inflation rose in December, according to the most recent consumer price index (CPI) data from the U.S. Bureau of Labor Statistics. Prices for apparel continued their downward spiral, however, pressured by the sluggish and highly promotional women’s sector.

The CPI, has accelerated over the last four months, despite the slight decline in grocery and steep decline in gasoline prices. In December, it increased by 0.7% year-over year. Taking food and energy out of the mix, the increase was over 2 percent, due primarily to increases in housing and medical service costs. 

The combined apparel and footwear price index fell by 0.9%, capping fourteen straight months of decline.

CPI1

The index for clothing also dropped by 0.9%. Footwear prices dipped by 1 percent in the month, its fourth consecutive monthly drop.

CPI2

A 2.2% drop in prices of women’s apparel, the largest segment in the market, was the biggest driver of price erosion in the category. Many retailers resorted to price promoting to move cold weather apparel after the unseasonably warm November and December weather.

Interestingly enough, men’s apparel prices managed an increase of 1.1% in the month.

CPI3

While boys’ apparel prices rose by 1.3%, prices of girlswear plunged by 2.4%. Infants’ and toddlers’ prices were flat.

CPI4

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