Footwear Distributors and Retailers of America (FDRA) released its monthly Shoe Price Report showing shoe prices are increasing at the fastest rate in over 20 years. Prices may increase further as products come available for the holiday.
FDRA said the first reason for potentially higher prices is the growing number of retail job openings that are pushing wages to record highs and driving consumer prices sharply higher.
The Bureau of Labor Statistics (BLS) is reporting the number of retail workers quitting their jobs jumped in August, an issue FDRA sees as contributing to rising inflationary pressures. “Quits are generally voluntary separations initiated by the employee. Therefore, rising quits can serve as a measure of workers’ willingness or ability to leave jobs. Often, these workers may quit for other, higher-paying jobs elsewhere,” said BLS. The BLS also recently reported average hourly earnings rose in September to $22.27. “These higher wages, in turn, are prompting employers to raise prices. Already, YTD retail footwear prices are up 3.2 percent versus the same period last year and are on pace to rise in 2021 at the sharpest rate in 22 years,” BLS continued.
FDRA Chief Economist Gary Raines said, “Shoppers typically accustomed to modest inflation may be surprised this holiday season to find limited staff in stores to explain why prices are appreciably higher.”
A second reason for potentially higher prices is soaring import charges and duties which are contributing to higher footwear prices
“Soaring import charges and duties paid on U.S. footwear imports are underlying factors driving retail footwear prices higher this year. Import charges—the aggregate cost of all freight, insurance and other charges, excluding U.S. import duties, on footwear imports soared to $146.3 million in August, the seventh straight double- or triple-digit year-over-year increase. Duties paid on footwear imports similarly rose at a double-digit year-over-year rate for the sixth straight month in August to $320.6 million, by far the highest August on record. Combined, these issues are contributing to pushing the average landed cost of footwear higher this year, in turn raising retail prices,” said BLS.
FDRA Raines remarked, “Footwear shoppers are feeling the repercussions from both higher duties from China and surging demand that are pushing retail footwear prices dramatically higher. We expect these gains to last well into next year.”
Photo courtesy DSW