1. Total Shoe Spending Climbs 0.5% y/y in May, Slowest in Thirteen Months

Key Takeaways

  • US consumer spending on footwear grew again in the latest month, rising a scant 0.5% year over year in May, slower than other key areas of consumer spending.


  •  At a seasonally adjusted, annualized $104.7 billion, footwear spending climbed for the fourteenth straight month to the biggest May on record. 

  • While the May advance supports our earlier outlook for another full-year expansion in 2023, we continue to expect footwear spending will see weaker gains--and likely even some contractions--later this year as economic activity presumably downshifts further.

Bottom Line

  • The May reading supports our earlier view that footwear demand will climb to a record in 2023, but likely at a rate slower than the 4.5% expansion posted last year. 

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2.Shoe Store Sales Shrank -3.2% year over year to the Smallest May in Three Years; Year-to-Date Reading Hints at Moderating Growth for Shoe Store Sales in 2023

Key Takeaways

  • Seasonally-adjusted shoe store sales declined -3.2% in May from a year earlier, the third straight decline after seven straight months of growth.

  • At a seasonally-adjusted $3.209 billion, shoe store sales faded to the lowest May in three years.

Bottom Line

  • The May decline concurs with economic signs we have discussed for some time suggesting retail sales may struggle to gain much traction in coming months.

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3. Full-Year Import Cost & Retail Price Outlook as Footwear Prices Dip in June

Key takeaways

  • As widely expected, retail inflation moderated further in June, with consumer prices climbing 3.0% year over year, the slowest expansion in 27 months. This latest reading extends a gradual deceleration since retail inflation peaked a year ago.

  • Footwear prices similarly softened, confirming our earlier forecast. After rising for 26 straight months, retail footwear prices sank -0.9% year over year in June.

  • In fact, footwear prices were lower across target markets, with women's footwear prices off -0.2%, children's footwear prices fading -0.8%, and retail prices for men's footwear declining for the fifth straight month, off -1.6%.

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4. Analysis of Shoe Store Labor Market Trends through May 2023

Key Takeaways

  • Rising in concert again with record average wages paid across the retail sector, average hourly earnings paid by shoe retailers continued to climb in May, up 19.8% year over year to a record $23.76, the tenth record in the last twelve months.

  • But with sales at shoe stores sagging, demand for workers is turning defensive. Already, average weekly hours worked at shoe stores has declined year over year for fourteen of the last fifteen months.

  • As a result, year-to-date shoe retailer employment is up only 2.2% from the same first five months of last year, suggesting full-year employment may see modest growth--at best--in 2023. 

Bottom Line

  • While the labor market remains strong, cracks are showing. When business slows, the easiest, quickest, and least painful labor costs for an employer to cut are overtime hours, followed by temporary labor and average weekly hours of traditional employees, followed finally by culling the number of traditional employees themselves. With average weekly hours already being cut, shoe retailers are starting to downsize head counts.

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5. Deep Insight: #380 Footwear Retail in Realtime with DBI’s Doug Howe

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