Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA), said on a media call Tuesday, March 24, the organization expects the spike in oil prices to put pressure on footwear margins, initially on logistics costs but eventually on components.
Priest’s comments come as the FDRA released its latest industry survey for the first quarter of 2026, which showed U.S. footwear executives more upbeat about the industry than in recent surveys, with many expecting sales to firm up and landed costs and retail prices to moderate further in the coming months.
In comments to the survey, several respondents were encouraged by the Supreme Court’s February 20 ruling striking down the Trump administration’s use of emergency authority to issue sweeping tariffs.
The FDRA conducted the consumer survey before the U.S./Iran conflict began on February 28. Crude oil prices have risen by more than 40 percent since the war began and by more than 60 percent since the start of the year, triggering price spikes in gas and jet fuel.
Priest said the most immediate fallout from the spike in oil prices on the footwear industry is in logistics. He said conversations with FDRA members indicate that fuel surcharges on containers have surged to $275 to $375. He added that the FDRA is hearing that spot or “kind of last-minute” rates outside contracts, often used by smaller footwear players, are facing surcharges ranging from $400 to $1,000. Priest noted that many major footwear vendors have contracts with shipping companies to “help weather these types of things.”
Air freight, sources have told the FDRA, is “significantly elevated” as jet fuel prices have surged about 75 percent following the late-February 2026 Middle East conflict. Priest added, “So, if you’re air freighting something into the U.S. market because you have a hot item and you’re trying to get that product to the consumer more quickly ahead of the Passover/Easter shopping season, you’re going to see elevated prices from an air freight perspective.”
Priest added on overall logistics cost pressures, “Rates overall were flat last year. So, we’re in a spot where they were somewhat depressed, but clearly, more imminently, the prices for transportation and energy are going to grow because of this environment. And, I think, we’re also an environment where a lot of people in the supply chain will see this as an opportunity or an excuse to claw in some additional costs because they’re concerned, maybe over the longer term, that oil prices will stay elevated no matter what happens relative to the conflict coming to an end.”
On the component side, Priest noted that oil is “used pretty prevalently” across footwear and apparel products. He cited EVA midsoles and foams used for cushioning footwear, as well as polycarbonate plastics, synthetic textiles, polyester fabrics, nylon fabrics, and spandex.
He estimates it will take two to three months for oil pricing pressures to impact the input side, as most suppliers have about two to three months of supply to work through. However, he noted that some products might have an oil content of 30 percent to 40 percent and “could see anywhere from a 3 to 5 to 7 percent increase” in the coming months.
Priest also noted that tariffs exacerbate the situation because the charges are based on FOB (freight on board). He said, “So, if components and input prices go up, you’re going to push up the price of the shoe, which then, ultimately, with these additional tariffs, gets compounded.”
Priest said that with U.S. tariffs implemented under Section 122 of the Trade Act scheduled to expire in late July, the FDRA is working with the Trump administration to minimize the impact of any new tariffs on footwear that might arrive under Section 301 of the Trade Act because of the disruption caused by the Middle East conflict.
“We think the timing is terrible,” said Priest of the potential new tariffs. “We don’t believe any time is right for any shoe tariffs, but it’s hard to find a worse time than right now because of what we’re seeing on a global scale.”
He noted that President Trump said last May that he does not see the feasibility of bringing footwear manufacturing back to the U.S. Priest said, “We hope that the administration remembers that comment from the President and that they more surgically approach these remedies that will not include additional tariffs on shoes, and so, we’re working through that process now.”
FDRA’s First Quarter Industry Survey
FDRA’s first-quarter 2026 survey did not reflect war concerns. Instead, members expressed a more upbeat outlook than in several recent quarters, indicating increased optimism despite external issues.
- Respondents’ six-month outlook for both the economy and shoe shopping improved again to the most favorable in five quarters.
- Over half of respondents expect that their company’s sales will increase over the next half year, the highest share in two years.
- Similarly, shares anticipating their planned comp sales to rise over the next 6 and 12 months rose to the highest level in several quarters.
- A seven-quarter high of 64.2 percent of surveyed respondents said their company sales are higher than six months ago, echoing the findings in the FDRA’s latest footwear spending report.
On the cost side, over two-thirds of footwear industry respondents see their landed costs as flat to lower over the next six months — an eight-quarter high — while a record-high one in five see their landed costs unchanged over the next year. Similarly, over two-thirds expect their retail prices to be flat or lower over the next six months, a six-quarter high. Moreover, fewer than half expect their retail prices to rise over the next year, a record-low share.
The survey also found that only 4 in 10 respondents expect their operating costs to rise over the next six months, a nine-quarter low.
The survey still found the footwear industry somewhat conservative in its approach to growth, with nearly two to three respondents not expecting to increase or decrease hiring over the next six months. Also, over half of the respondents do not expect their inventories to change much from six months ago or over the next six months, echoing findings in FDRA’s latest quarterly inventory report.
Government (taxes/duties/regulations) still ranked as surveyed respondents’ “biggest issue over the next six months” for the sixth straight quarter and even jumped from the fourth quarter of 2025, when “new consumer behavior shifts” was cited by many as their top concern.
Comments collected as part of the survey showed that footwear executives are bracing for continued uncertainty tied to tariffs, inflation and other margin pressures, but some are more optimistic about trade relief than in previous surveys.
Comments shared regarding the forecast for the market this year include:
- “If the tariffs either go down to zero or stay at 10 percent, then I expect us to have a good 2026.”
- “I anticipate the economy getting some momentum behind it while the cost of living cools. Interest rates will drop, which should fuel this recovery. Tariffs are still the wild card that could disrupt the pace of recovery, but I strongly believe economic recovery is underway.”
- “Higher operating costs — medical inflation is rampant. Lower margins — price concessions to offset tariff refund pass-through. One-time pop in earnings but uncertain effects from any tariff refunds. “
- “Despite the Section 122 tariffs the administration put into place, the reduction of tariffs due to the Supreme Court’s IEEPA decision will result in higher gross margins, enabling increased investment. Hopefully, consumer spending will get a boost from moderated inflation, leading to continued strong demand.”
- “Hopefully, stabilization of outstanding issues that impact the industry will allow better planning.”
- “We will experience continued uncertainty with tariff prices for China production. Consumers will be deal/value sensitive for 2026.”
