Growth of 0.4% year-on-year in 2012 is the second lowest growth rate in the UK footwear market since 2000. Footwear is a discretionary spend that can be deferred, though less so for children, and consumers, faced with continuing financial uncertainty and possible job losses are putting unnecessary expenditure on hold. Volumes will recover only marginally (+0.1%) as inflation eases to 0.3%.
Future growth in the women's footwear sector will be driven by value players and high end retailers such as Kurt Geiger, as low price footwear sold by the likes of Primark will boost volumes, while spend is increased by consumers trading up to retailers at the premium end of the market for branded goods. This leaves the middle market exposed.
We predict that specialists Kurt Geiger, Office and Schuh will all increase market share in 2012, owing to strong propositions, broad consumer appeal and trend-led images. Kurt Geiger in particular has encouraged shoppers to trade up and invest in higher price, good quality shoes despite consumers' squeezed disposable incomes.
JD Sports and Sports Direct have improved their standing in the market, often at the cost of similar retailers such as JJB. Sportswear players are heavily reliant on branded footwear, therefore need to compete on price, range and service to drive footfall and sales. The Olympics will provide a clear opportunity for such retailers to boost sales.