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Shoe prices were lower again in May as overall inflation remained “tame” last month, according to the latest data from the Footwear Distributors and Retailers of America (FDRA).
In May, retail footwear prices slid 1.6 percent from a year ago, the steepest drop in more than four years, the FDRA noted. This comes as prices were lower across each target market, led by men’s footwear prices falling 2.4 percent, the most in four-and-a-half years since the dark days of the pandemic.
As for women’s shoe prices, the category declined 1.5 percent, the sharpest in eight months, while children’s footwear prices slipped 0.5 percent in May.
Gary Raines, chief economist at FDRA, told FN that while last month’s declines peg year-to-date footwear prices modestly lower from the same first five months of last year, change is coming.
“There is mounting evidence upstream in the supply chain of surging average duties per pair on footwear imports,” Raines said. “These higher duties soon may push the average landed cost of footwear imports sharply higher, which in turn may pressure retail footwear prices to climb later this year.”
This movement in shoe prices comes at the same time as the United States and China agreed to a “handshake” deal that will enable the two superpowers to resume the terms of their provisional trade agreement.
Following two days of talks between senior state officials in London, Commerce Secretary Howard Lutnick told reporters on Tuesday that the parties had “reached a framework to implement the Geneva consensus and the call between the two presidents,” referring to a discussion between the leaders that took place last week. China Commerce Ministry international trade representative Li Chenggang echoed that a consensus had been reached “in principle.”
The representatives sought to mend fences following an escalation in trade tensions over the course of recent weeks, wherein both China and the U.S. accused the other of violating the terms of a provisional trade deal brokered in Geneva in mid-May. During the Switzerland talks, the U.S. and China delegations hashed out an agreement to suspend for 90 days the implementation of reciprocal duties which were drastically rolled back to much lower rates.
Heading back to Washington following this week’s meetings, Lutnick said he and Greer will convene with the president to ensure that he approves of upholding the terms of the Geneva truce. If Xi also approves the conclusions arrived at during the talks, “We will implement the framework,” the Commerce Secretary said.
Last month’s drop in retail footwear prices also comes at the same time the Bureau of Labor Statistics reported that overall inflation increased slightly in May.
The bureau’s latest Consumer Price Index (CPI), a broad measure of goods and services costs across the U.S. economy, saw prices increase 0.1 percent on a seasonally adjusted basis in May, after rising 0.2 percent in April. Prices were also up 2.4 percent over the last 12 months, after rising 2.3 percent the prior month.
Excluding volatile food and energy costs, the core CPI rose 0.1 percent in May and increased 2.8 percent over the same time last year.
