Global Sneaker Sales Decline, Signaling Market Downturn
Nike and adidas face struggles as smaller brands climb.
According to a Business of Fashion report, the growth of global sneaker sales fell in 2022. Signaling a market downturn, the high-growth phase which resulted in a 19.5 percent spike in 2021 looks to have ended. Global sneaker sales in 2022 totaled $152.4 billion USD, despite reflecting a 2.7 percent increase according to Euromonitor, the dramatic decline shows that the market is changing.
The sneaker industry is now projected to grow at an annual average rate of 3.6 percent until 2027 as the footwear space is no longer being dominated by sneakers with mules and loafers rising in popularity. Although Nike and adidas will likely see growth, the two major brands are currently facing oversupply inventory issues and declining sales in China with a local shift to Anta and Li-Ning. Not to mention all of the controversies they faced in 2022, leading to Nike sitting on $9.3 billion USD (43 percent year-on-year) worth of stock and adidas holding onto $6.7 billion USD in inventory (73 percent year-on-year) at the end of the quarter (November 30, 2022).
Offering from Nike and adidas continued to be sought after but sneakerheads have become bored with their countless launches, allowing for smaller performance brands to offer sparks of interest in the sneaker space. Generating interest through collaborations breakthrough brands include ASICS (18 percent year-on-year increase, $229 million USD), Mizuno, Merrell, On Running (67.2 percent year-on-year increase, $567 million USD), and Salomon.
The sneaker market is expected to face challenging macroeconomic conditions in 2023 with falling consumer demand. Though an opportunity does seem possible as sneakers have always seen a spike in a recession environment.
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