July Inflation Levels Still High — But Could Footwear Prices Be Leveling Off?
Consumer prices rose by 5.4% in July versus a year ago, according to the Bureau of Labor Statistics’ monthly report, with the prices of footwear still showing significant increases, though at a slightly slower pace than a month ago.
Footwear prices increased 4.6% in July, compared with the year-ago period, with women’s footwear prices up 5.8%. Prices for kids shoes rose 3.6% and men’s footwear prices increased 3.7%.
Comparatively, last month, women’s footwear prices spiked 7% year over year, the sharpest advance in nearly 32 years, according to the Footwear Distributors and Retailers of America.
Month over month, however, total footwear prices fell 0.9%, with women’s footwear prices down 0.1%, kids down 1.8% and men’s declining 1.2%.
Andy Polk, SVP at the FDRA, said July’s figures are starting to show what could be a normalizing of inflation in the market. “Retailers are stabilizing their prices versus adding extra costs,” he said.
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But Polk said retailers are still facing inflation on the operations and supply chain sides — having to pay about four times the normal rate for shipping. Ongoing supply chain issues at overseas ports in China and Vietnam are hampering shipments of goods like footwear, something expected to continue into the all important holiday season, though at a slightly lesser degree than in the fall of 2020, one of the heights of the COVID-19 health crisis.
With the upcoming holiday selling period on everyone’s minds, there are valid concerns surrounding product — how much retailers will have on shelves and the delicate balance between offering discounts and making a profit.
“The biggest concern going into the holidays is scarcity of product,” Polk added. “What’s happening is that a lot of companies are trying to bring in holiday product earlier than ever and that’s adding an extra component into the supply chain to get it into stores.”
Elsewhere in the government report, energy prices in July contributed significantly to the overall Consumer Price Index, rising 23.8% in total year over year, with energy commodities, such as fuel and gas, up 41.2%. Food prices, meanwhile, rose 3.4% from July 2020.
Excluding the food and energy categories, prices rose 4.3% in July year over year and were up 0.3% as compared with June.
Other noteworthy categories include used car and truck prices, up 41.7% in July versus a year ago and up 0.8% month over month; airline fares rose 19.1% from July 2020 but fell 5.1% from June; and total transportation services — which include airline fares, motor vehicle insurance and vehicle maintenance and repair — rose 6.4% in July versus 2020 and decreased 0.8% from the prior month.
