Prices will continue to rise but at a more modest rate over the next two years, as more promotional activity resumes
Port Washington, N.Y., February 28, 2022 – Slow but steady will be a predominant theme for the U.S. footwear industry over the next two years. Largely due to pent-up demand and higher average selling prices, footwear revenues hit a high point in 2021, growing by 23%, versus 2020, as unit sales also increased by double digits. However, both revenue and unit sales are projected to level out through 2024, according to The NPD Group.
The latest “Future of Footwear” report, based on Retail Tracking Service data from NPD, forecasts that prices will continue to rise through 2024 but at a more modest rate, as promotional activity will resume and offset pricing increases. Industry revenue and unit sales are on track for a single-digit increase through 2024, although units will remain just under pre-pandemic 2019 levels.
“The number and depth of promotions have declined since the pandemic began,” said Matt Powell, sports industry advisor at NPD. “Supply issues led to lean inventories, which allowed brands to promote less and sell more shoes at full price. Supply chain issues will ease starting this year, but the industry runs a real risk of overshooting demand, which will cause more promotion and lost margin if improperly managed.”
Comfort continues to reign supreme
The fashion footwear category is lagging behind the sport-leisure, performance, and outdoor footwear categories, in terms of recovery. However, as consumer lifestyles shift to include more social activities, certain styles will help the fashion category exceed 2019 revenues by the end of this year.
“Although unit sales will lag, we expect the fashion category will exceed its 2019 revenue mark, aided by rising prices,” said Beth Goldstein, fashion footwear and accessories analyst at NPD. “The standout silhouettes will be those that align with consumers’ demand for casual comfort, as they return to some pre-pandemic events and activities, while at the same time holding onto some pandemic-related behaviors.”
Comfort elements are the most important feature U.S. consumers seek when purchasing footwear. Illustrating the importance of causal and comfortable footwear in consumers’ closets, the NPD study found that a potential 15% price increase would affect sneakers and causal shoes less negatively than others. In fact, one-third of consumers would delay buying higher-priced dress and outdoor shoes, winter boots, and slippers; however, the majority would purchase as planned when it comes to athletic and casual footwear.