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US footwear industry expects sales to decline

Jul 13, 2022 United States

According to the Footwear Distributors & Retailers of America (FDRA), the footwear industry is pulling back on hiring and investment due to a major forecast of weaker sales for the next six months

A survey from the trade group that represents nearly 500 US shoe retailers and brands shows that 87% of the companies are anticipating a decline in sales in the next six months. Operating costs are also expected to continue rising. With inflation as a top concern, two-thirds of executives believe new hires will decrease or stay flat, and a majority is reducing capital expenditure or keeping it flat. These results are in stark contrast with the survey released in March, in which the same number of participants were boosting staff and planning higher investments.

In a phone interview with Bloomberg, the President of FDRA, Matt Priest, said these findings were "dramatic" and "concerning", recalling that shoes are a key barometer of economic health since they are a necessary good that consumers repeatedly buy.

He added that the footwear industry could be providing an early glimpse of what is yet to come: as the US economy is mainly driven by consumption, "we see the impact of a slowing economy before the numbers are official". The Commerce Department reported that the US economy shrank at an annual rate of 1.6% in the first quarter, and a recession is normally defined by two consecutive quarterly declines in gross domestic product.

Image Credits: robbreport.com

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