United States: the highest inflation in the last 30 years, also affects footwear
According to the latest report published by Footwear News and distributed by FDRA -Footwear Distributors and Retailers of America- consumer prices increased 6.2% in October 2021 compared to the previous year, according to a statement from the Bureau of Labor Statistics. This number represents the highest inflation rate since the 12-month period ending in November 1990.
The biggest change was registered in the energy index, which rose 4.8% in the month, led by a 6.1% jump in gas prices. However, the increases were wide across the US economy. Airfare and alcoholic beverages were among the few areas that registered declines.
Footwear continued to show increases, a trend that has been taking hold over the last six months.
Footwear prices increased 5.2% in October, compared to the same period last year. The prices of women's footwear rose by 4.2% and those of men by 5%. The prices of children's shoes rose 7.5%. The results marked the sixth consecutive month that shoe prices have continued to rise. In June, prices for women's footwear rose 7% after a year, marking the steepest price increase in nearly 32 years, according to Footwear Distributors and Retailers of America (FDRA).
A confluence of factors has contributed to the rapid rise in prices, which began with skyrocketing consumer demand along with a limited supply of products.
In the footwear category, the global shortage of rubber and plastic, which are essential in the production of sneakers, has made it difficult for factories to produce enough to meet demand. A phenomenon aggravated by the shortage of workers and the closure of factories abroad in China, Malaysia and Vietnam. Import duties and charges, including freight and insurance, have risen to $ 3.6 billion so far this year, 36.8% more than in the same first nine months last year, also contributing to sudden price increases.
The FDRA estimates that consumer spending on footwear could exceed $ 100 billion for the first time this year, up from $ 77.6 billion last year.
"While imports, an indicator of supply, are poised to rebound in 2021, this rebound is unlikely to be as large as the increase in consumer demand for footwear," explained the FDRA chief economist, Gary Raines.
Additionally, certain retailers have started offering higher starting salaries and benefits to attract and retain talented salespeople amid a highly competitive market, meaning that retailers must also raise prices to make up for money spent on salaries. Macy's recently announced that it would increase its minimum wage to $ 15 an hour and launch a tuition benefits program for all salaried and hourly employees in the United States. Meanwhile, Amazon raised its median starting salary to more than $ 18 an hour to meet its goal of hiring 125,000 logistics and transportation employees, with some warehouses offering a $ 3,000 job start bonus.
Source: Footwear News/FDRA
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