Cost of merchandise and raw materials is the main concern of the footwear business

The expectation of price increases is being driven by the upward pressure in the cost of materials. This is now referred by 84% of our respondents as one of the three main difficulties for the next six months, being the main concern of footwear businesses by a very large margin.

This can be explained by the global supply chains slow down, started by the pandemic, which has created shortages, and increased costs. Additionally, new virus outbreaks and responding lockdowns in some parts of the world are scaling down production, leading prices to increase, and can also help to explain the following difficulty, human resource problems, which were mentioned by 43% of respondents as a main source of concern.

References to demand as a main source of concern have plunged since the Spring edition of the Bulletin, from 50% to 20%, in the case of the respondents’ home markets, and from 48% to 14%, in what concerns international markets.

References to financial difficulties have also greatly abated, from 44% in the previous edition to 20% in the current one even if they continue to be the fourth most relevant source of difficulties for the business.

On the contrary, references to problems associated with competition in international markets declined slightly in importance in comparison to the answers in the previous edition (from 23% to 16%).

Finally, issues associated with regulatory or administrative requirements, legal or administrative obstacles to international trade, taxes and climate seem comparatively less pressing than other difficulties.

How have the industry’s concerns evolved?

When the first edition of this survey was published, in the second semester of 2019, competition in international markets led the concerns of the footwear business. With the COVID-19 pandemic, demand-side factors, such as insufficient demand in international markets, become much more pressing. However, since the pandemic crisis started showing signs of improvement, cost concerns are on the rise.

 

Contents

Executive Summary
Business Context
Health of the Business
Employment Level
Prices
Quantity
Difficulties
Types of Footwear
Possible Explanations
Retail Channels
Post-Pandemic Expectations
Footwear Prices to Grow 20% Until 2025
Footwear Business not Expected to be Carbon Neutral by 2050
About the Survey

About the Survey

In 2019 the World Footwear has created the World Footwear' expert panel and is now conducting a Business Conditions Survey every semester.

The objective of the World Footwear Experts Panel Survey is to collect information regarding the current business conditions within the worldwide footwear markets and then to redistribute such information in a way it will provide an accurate overview of the situation of the global footwear industry.

The fifth edition of this online survey was conducted during the month of October 2021. We have obtained 122 valid answers, 43% coming from Europe, 30% from Asia, 13% and 7% from North and South America, respectively, 6% from Africa and 1% from Oceania. Half of respondents are involved in footwear manufacturing (manufacturers) – 31% – or footwear trade and distribution (traders) – 19% – and the other half in other footwear-related activities such as trade associations, consultancy, journalism, etc. (others).