Federal Association of the German Footwear and Leather Goods Industry
• The corona pandemic causes a 21 percent sales collapse in the first half of 2020
• Imports and exports decline
• HDS/L calls for no additional burdens to facilitate economic recovery
Sales and employment trend
The corona pandemic ended the upward trend that the German footwear industry had experienced in recent years. The worldwide closing of the stationary sale outlets of the specialized retail trade caused sales of the industry to collapse in the first half of 2020. Sales of German manufacturers employing at least 50 workers fell from 1.62 to 1.28 billion euros in the first six months of 2020 compared to the same period last year. This is equivalent to a sales drop of roughly one-fifth (-21.0 percent to be more precise). Domestic sales of almost one billion euros were 22.5 percent lower than those recorded in the first half of 2019. International sales fell from 269 to 232 million euros in the first half of 2020 compared to the first half of 2019.
Nevertheless, German footwear manufacturers have kept employment stable so far. From January to June 2020, the sector employed a monthly average of 15,587 workers. Compared to the same period last year, this corresponds to a 0.7 percent increase. The federal government certainly contributed significantly to this by allowing the continuing possibility of short-time work.
The increase of producer prices in the German footwear industry continues in spite of the corona pandemic. Producer prices for shoes saw an overall increase of 0.6 percent in the first half of 2020 compared to the first half of 2019. However, there are differences among the various types of shoes. Whereas producer prices for safety shoes increased, they fell 0.5 percent for other types of shoes. Slight increases were recorded in the producer prices for textiles, clothing and leather goods (textiles: 0.2 percent; clothing: 0.8 percent; leather goods: 1.2 percent). As a whole, producer prices for commercial products fell 1.1 percent in the first half of 2020 compared to the first half of 2019.
Consumer prices rose 1.2 percent from January to June 2020 compared to the same period last year. For shoes as a whole, consumer prices recorded only a slight increase of 0.7 percent. For men’s shoes, consumer prices even fell 0.5 percent compared to the first half of 2019. There were increases in women’s shoes (+0.8 percent) and children’s shoes (+2.4 percent).
In the first half of 2020, Germany exported 146.4 million pairs of shoes with a total value of 3.2 billion euros. Compared to the first half of 2019, this corresponds to a 17.9 percent decline of the exported number of pairs. The value of the exported shoes fell 14.5 percent, going from 3.7 to 3.2 billion euros. The average price of an exported shoe was 21.79 euros in the first half of 2020, which corresponds to a 4.2 percent increase compared to the first half of 2019.
Shoe exports experienced a dramatic collapse due to the Corona pandemic. Exports of many important exporting countries experienced a double-digit decline of 14 to 36 percent. Poland was an exception: In the most important buyer country of shoes made in Germany, the number of exported pairs of shoes decreased by only 1.8 percent, going from 30.4 million in the first half of 2019 to 29.9 million pairs in the same time period in 2020. On the other hand, two-digit export declines were recorded for other important buyer countries (France: -15.9 percent to 17.8 million pairs; Slovakia: -22.5 percent to 11.1 million pairs; Italy: -20.5 percent to 9.1 million pairs). The British market is facing unimagined challenges. So far, it was “only” the uncertainty about the future trade relations with the EU. Now, the coronavirus ensures a fully-fledged British economic crisis of historic proportions, which is also reflected in the shoe sector: Exports of shoes from Germany to the United Kingdom fell 28.8 percent in the first six months of 2020 compared to the same period last year, going from 9.1 to 6.5 million pairs.
The European internal market is of crucial importance for the German foreign trade with shoes. In the first half of 2018, the share of all shoes exported from Germany to EU countries was 85.4 percent. This share increased to 88.0 percent in the first half of 2020. In the first six months of 2020, Germany exported 128.9 million pairs of shoes to the countries of the European Union. Compared to the January to June 2019 time period, the absolute number of shoes exported to EU countries fell 17.4 percent.
Export collapse in all shoe segments: Whereas 66.3 million pairs of textile upper shoes were exported from Germany in the first six months of 2019, 52.9 million pairs of shoes of this type were exported during the same time period in 2020, a decline of 20.2 percent. Similarly high declines occurred with other types of shoes (leather upper shoes: -16.4 percent to 39.3 million pairs; plastic upper shoes: -16.0 percent to 49.9 million pairs).
Approximately one seventh fewer shoes were imported in the first six months of 2020 compared to the same period last year. The import value fell from 5.2 to 4.7 billion euros, which corresponds to an 8.8 percent decline. The average price of an imported pair of shoes rose 7.0 percent to 14.23 euros.
China is the world’s largest shoe manufacturer, which is the reason why the shoe industry was affected early by the coronavirus outbreak. This is especially apparent in the imports. Compared to the first half of 2019, the number of shoes imported from China to Germany decreased almost one-fourth, going from 190.8 to 145.4 million pairs. The decrease is smaller for other supplier countries. In the January to June 2020 time period, 56.7 million pairs of shoes were imported from Vietnam to Germany. Compared to the first half of 2019, this corresponds only to a 3.0 percent decline. On August 1st, the free trade agreement between the EU and Vietnam took effect. This is an important signal in times of increasing protectionist measures.
Indonesia has become increasingly significant for imports, as the number of imported shoes rose 8.5 percent, going from 19.0 to 20.7 million pairs of shoes.
European supplier countries have been severely affected by the corona pandemic. Whereas fewer shoes were imported from Portugal to Germany in the first six months of 2020 compared to the same period last year (a 21.4 percent decline, down to 5.2 million pairs), 14.0 percent fewer shoes were imported from Spain to Germany.
The import declines differ among the various types of shoes. There has been a single-digit 9.9 percent drop for leather upper shoes. At the same time, there are two-digit declines for plastic and leather upper shoes (plastic upper shoes: -14.1 percent, down to to 107.6 million pairs; textile upper shoes: -16.6 percent, down to 132.7 million pairs). Whereas imports of leather upper street shoes fell 6.5 percent, going from 68.3 to 63.8 million pairs, the imported number of plastic upper street shoes declined 19.0 percent, going from 47.9 to 38.1 million pairs.
2 september 2020