The growth of the German footwear industry weakened considerably in 2018, weighed down by lower sales abroad, according to an annual report by the Federal Association of the German Footwear and Leathergoods Industry (HDS/L), presented at last month's Gallery Shoes fair in Düsseldorf.
In 2018, the total sales of German shoe producers with at least 50 employees inched up by 0.7 percent from 2017 to €2,960 million. While domestic sales grew by 3.2 percent, sales in other countries collapsed by 9.5 percent to €526.5 million, due to considerably lower revenues in the euro zone countries. As compared to 2017, foreign sales in the euro zone decreased by 12.7 percent to €339.2 million.
Sales in other parts of the world dropped by 3.1 percent to €187.4 million. A notable exception to the general trend was Russia, where Germany's shoe exports grew last year by 8 percent in volume to 3.87 million pairs and by 10 percent in value to €91.4 million.
Germany exported 306.2 million pairs, which represents a 7.7 percent increase from the previous year. The average price of a pair exported from Germany was up by 1.3 percent to €22.34.
Poland replaced France as the most important destination country for German footwear. The number of exported pairs in the eastern European nation increased by 28.6 percent to 46.5 million pairs. At the same time, shoes exported to France fell by 6 percent to 36.5 million pairs. A decrease in shoe exports was also seen across important countries such as the Netherlands and Slovakia, with drops of 9.3 percent and 8.8 percent, respectively.
Germany exported a total of 21.6 million pairs of shoes to Italy in 2018. Compared with 2017, this corresponds to a 31.3 percent increase. Meanwhile, the share of exports to the U.K. rose from 6.4 to 6.7 percent, as the number of exported pairs went up by 11.4 percent to 20.3 million.
In terms of product, sneakers again stood out, with every third exported shoe fitted with a canvas upper. The number of exported pairs rose by 9.2 percent to 111.5 million. Sandals also performed well.
Regarding imports, around 1.3 percent more shoes were imported in 2018, reaching 708.4 million pairs, but their value fell by 0.1 percent to €10,060 million. The share of footwear originating from China rose from 46.6 to 47.2 percent.
The picture is mixed for imports from European countries. Whereas imports from Portugal fell by 7.6 percent to 14.4 million pairs, imports from Italy, the Netherlands and France advanced by 3.8 percent, 10.1 percent and 7.4 percent, respectively. As usual, the Netherlands continue to serve mainly as a transit point from outside the European Union.
In spite of the stagnating sales trend, the number of employees in the German footwear industry kept growing. In 2018, there were 15,404 employees working German footwear companies, a 4.4 percent increase as compared to 2017.
HDS/L pointed to the important related topic, digitalization. To implement it successfully, the recruitment of skilled workers continued to gain importance.
In addition to sluggish sales, HDS/L said the German footwear industry has some concerns about excessive environmental requirements. Over 80 companies have joined CADS – the sector's cooperation for sustainability – to standardize requirements and prevent harmful substances in footwear. The association pointed out that the requirements set by the industry itself are in many cases stricter than the legislative requirements.
However, it noted that current political and administrative developments are a big cause of concern, with regional authorities “criminalizing” medium-size entrepreneurs even if a limit is barely exceeded with one single shoe.
Moving forward to 2019, the German footwear industry is expecting a difficult and challenging round of orders for the first six months of 2019, as German footwear manufacturers are facing a weakened demand from retailers. While it is anticipating steady sales of safety shoes and sports shoes, it expects demand to stagnate in other areas.