According to a Footwear Distributors & Retailers of America (FDRA) survey of 500 U.S.-based shoe brands and retailers, 87% of companies expect weaker sales in the next six months. These companies, which include players such as Allbirds, Nike, and Walmart, also expect costs to continue to rise.
The survey also found that two-thirds of executives expect hiring to either decline or remain flat. Meanwhile, most of them plan to reduce capital expenditure or expect to keep it flat.
The survey results are in line with gloomy forecasts issued by major retailers such as Target and Kohl’s, which are all struggling with higher operating costs and increased inventories.
Many of these issues are a result of rising inflation and ongoing supply chain issues, said FDRA CEO Matt Priest, who called the results “dramatic” and “concerning.”
The decline in demand for footwear is particularly worrisome as shoe sales serve as a barometer for the broader economy as most consumers tend to buy shoes on repeat, Bloomberg reported.
“Because our economy is mainly driven by consumption, we see the impact of a slowing economy before the numbers are official,” he said.
While the decline in shoe sales is bad news for the broader U.S. economy, it is good news for bargain hunters, as nearly half of survey respondents said they expect to see more discounts over the next six months.