The NPD Group said Thursday. According to the market research company’s latest “Future of Footwear” forecast, sales revenue will grow slightly, at a rate of 1% through 2025, with unit sales beginning to improve in 2024. Consumers will look to maximize versatility with their upcoming footwear purchases, as shoes good for “casual everyday use” will top the reasons for purchase in the first half of 2023, the forecast noted. [NPD: 2023 Will Be a 'Reset' Year for Footwear Industry + Sales Volatility to Level Out in Next Few Years- FN]
Beth Goldstein, footwear and accessories analyst at NPD, told FN that this stabilization is due to several factors including retail price increases continuing to moderate, which will be offset by promotional activity. Goldstein also noted that demand is not expected to grow any further in 2023 as consumers prioritize their spending due to economic pressures.
“This will be a reset year for the footwear industry,” said Goldstein. “After three years of ups and downs, we can expect sales and price trends will level out as consumers settle into their now-familiar lifestyles and make strategic choices about their must-haves versus their nice-to-haves, as they continue to grapple with macroeconomic pressures.”
As consumers weigh their priorities this year, the blurring of fashion and athletic footwear will continue to be part of the equation, the forecast noted. Casual footwear, sneakers and athletic footwear are most likely to be considered necessities, compared to dress footwear, outdoor shoes, and slippers, which are more likely to be viewed as non-essential.
The sport leisure category generated the highest sales in 2022, but fashion footwear was the biggest driver of growth. “While the fashion footwear market will continue to benefit from these social behaviors in 2023, their impact will begin to level off, as the replenishment needs that propelled the category in 2022 will slow,” said Goldstein.
The same could be said for dress footwear, Goldstein told FN. “Dress footwear growth outpaced that of other categories in 2022 as calendars once again filled up with social occasions, however sales remain below pre-pandemic levels.”
Goldstein added that moving forward, there is no indication that the demand for dress styles will continue at this level. “It is important for brands and retailers to plan accordingly and not overcorrect,” she noted.
“In a market projected to remain steady at the topline level for the near term, the key growth opportunity for footwear brands in this environment will be taking market share,” added Goldstein. “Part of this strategy will involve keeping pace with the demands of consumers who have become more deliberate in their purchases. The other part will be navigating a channel landscape that is far from static.”
This forecast comes days after the Footwear Distributors and Retailers of America (FDRA) said that inflation will likely continue to slow in the coming months as inventory exceeds demand in the footwear market. In 2022, full-year footwear prices rose 4.6% at the fastest rate in four decades.
Footwear retail price increases slowed in January, and were up 0.4% compared to last January, the slowest growth in 22 months. Compared to last year, men’s footwear was up 0.5%, women’s was up 0.1% and kid’s was up 0.9%.
