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The US footwear market saw a decline of 1% on average per annum over 2006-2012, to reach a market value of US$43.5 billion in 2012. Even with significant fluctuations in market size, the revenues generated by different buyers remained rather stable.
Household demand retracted as a result of rising rates of unemployment, falling disposable incomes, reduction in household wealth, high energy and food costs, plummeting per capita spends and crumbling consumer confidence.
Decline in income levels have reduced the spending on clothing especially apparel and footwear (including casual, outdoor, sports, and formal footwear). Tight liquidity and financial constraints have redefined value and have induced simplicity in lifestyles and this marks the beginning of shifting consumer focus towards value for money bargains.
In 2012, households generated 86% of demand, while the remaining share came from business to business sales.
The largest share of business to business sales comes from sales to public administration, defence and social security institutions. Since 2006, this group increased its spending by 60%, accounting for 21% of all business to business demand in 2012. Sales to other types of business customers are fragmented with no clear leaders.
The number of companies operating in the industry declined by 27% since 2006, to reach 263 firms in 2012, with 89% of companies being SME's. Munro & Company Inc specialises in the manufacturing of footwear for men and women. The company owns three manufacturing facilities in Arkansas in the US.
US shoe manufacturers continue to feel the heat from imports. Shoe makers are increasingly off-shoring their production to lower-cost countries to satisfy a growing proportion of domestic demand.
There are many manual steps involved in the assembly process of shoes and, as such, the current level of technological innovation will not alter this significantly. Instead, many manufacturers have chosen to outsource production processes to low-cost Asian countries in order to save on labour costs and have kept the high-value design and marketing activities domestic.
Over the next five years, turnover within the US footwear market has been predicted to decrease at a compound annual growth rate (CAGR) of 1% on average and drop to US$1.8 billion by 2018.
For more information on the US footwear market, see the latest research: US Footwear Market
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