The clothing sector is the second largest in UK retail. The influx of value fashion has forced the specialists to re-think their value proposition, with the mid-market in particular feeling the squeeze. There has been a major drive for efficiencies, but commentators see little room for further price cuts. As the wow-factor of low prices wears off and interest in green and ethical issues is slowly rising, the deflationary cycle may finally break. However, clothing retailers are likely to feel the pinch if the Bank of England manages to curb the nation’s spending – something the shoppers have thus far resisted. Competition looks set to remain fierce.