Following a year of record growth in 2021, footwear sales are projected to level out through 2024.
According to The NPD Group’s “Future of Footwear” report, footwear prices will continue to rise through 2024, though at a slower rate than the past year, in part due to the return of promotional activity. Unit sales and revenue will likely see a single-digit increase through 2024, NPD data showed, with unit sales hovering slightly below 2019 levels.
Like other retail sectors, the footwear industry saw an upheaval throughout the pandemic, with record high prices and revenue across multiple categories. The American footwear industry broke annual records in 2021 at over $100 billion reached in total spending, according to data from the Footwear Distributers and Retailers of America (FDRA). Overall, footwear revenues grew 23% in 2021 over 2020, with unit sales also increasing in the double digits.
This revenue growth was partly driven by a lack of promotional activity during the pandemic due to strong demand and less product as a result of supply chain disruptions. As discounts begin to resume, prices and revenue gains are expected to start coming down.
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“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.”
When it comes to styles, NPD data showed that comfort and performance categories are still outperforming fashion footwear. However, the fashion categories are expected to exceed 2019 levels this year, as more people resume social activities outside of the house.
“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 on to some pandemic-related behaviors.”
Comfort is so important to consumers that those hit with a 15% price increase on sneakers and other comfortable shoes would be less deterred from purchasing a pair, NPD found. However, people are more likely to hold off on purchasing more formal or outdoor shoes if they showed the same price increase.
