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NPD Forecasts ‘More Moderate’ Footwear Growth Over Next 2 Years

The NPD Group is predicting continued but “more moderate” price growth in footwear over the next two years.

According to the group’s latest “Future of Footwear” report, pent-up demand and higher average selling prices drove footwear revenues up 23 percent last year to record levels. Unit sales also grew in the double digits.

Both metrics are expected to “level out” through 2024 as promotional activity resumes and offsets price increases. NPD predicted footwear revenue and unit sales are in for a single-digit increase through 2024, with total units remaining “just under” 2019 levels.

“The number and depth of promotions have declined since the pandemic began,” Matt Powell, sports industry advisor at NPD, said in a statement. “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.”

Though fashion footwear has lagged behind the sport-leisure, performance and outdoor footwear categories since the pandemic began, NPD expects the category will finally exceed 2019 revenues by the end of 2022 as consumer lifestyles shift to include more social activities and higher prices boost sales.

Unit sales, however, will lag, Beth Goldstein, fashion footwear and accessories analyst at NPD, said. Though falling Covid cases are encouraging many in corporate America to finally return to the office, past NPD research has shown that more than 50 percent of consumers now wear casual sneakers to work, while less than 20 percent sport dress styles.

“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 onto some pandemic-related behaviors,” Goldstein said in a statement.

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According to NPD, comfort elements are “the most important feature” for U.S. shoe shoppers. In its study, the group found that a hypothetical 15 percent price increase would affect sneakers and casual shoes less than other styles. Furthermore, one-third of consumers said they would delay buying higher-priced dress and outdoor shoes, winter boots and slippers, while the majority said they would purchase athletic and casual footwear “as planned.”

In January, Powell predicted that 2022 would be another strong year for running, walking and hiking. Performance running, specifically, will benefit as it returns as streetwear, with Puma and On leading the shift, he said.

“This hasn’t been the case for nine years,” Powell said. “This trend will require brands and retailers to change the way they bring products to market. Those that don’t make this fashion-oriented shift will face potential sales challenges.”

Brands like Nike, Jordan and Adidas, meanwhile, will underperform the market, the analyst predicted. Powell placed Lululemon, APL and Nobull among the top emerging sneaker brands.