Across all the sectors, British retailers suffered the worst month of December in a decade in terms of sales, but they are not the only ones to be concerned. Aside from the disruption of traditional business models caused by the expansion of online sales, there are alarming signs that the economy is undergoing a significant slowdown in the whole of Europe and that the situation could further worsen this year.

According to the British Retail Consortium (BRC), retail sales were flat in the U.K. year-on-year in December and even fell by 0.7 percent on a comparable store basis. The picture is even bleaker if food sales are stripped out. According to the BRC, average sales for all categories rose by 0.5 percent year-on-year in the last three months of 2018, with food up by 1.8 percent and non-food down by 0.4 percent.

Data supplied by Barclaycard show that overall spending on clothing dropped by 3.0 percent in the U.K. in December, while expenditures in the shoe shops fell by 1.3 percent. Overall consumer spending grew by 1.8 percent year-on-year in December, the lowest monthly growth rate since March 2016. When adjusted for an annual inflation rate of 2.3 percent, the figure indicates a contraction in spending in real terms.

Barclaycard noted that, in light of numerous reports of store closures and the challenges that main-street retailers are facing, 52 percent of Britons want to support local shops. It added that 38 percent claim to be deliberately choosing local retailers over online ones. But despite efforts to support the local economy, 49 percent of consumers expected that they will reduce spending in January to cover expenses incurred over Christmas and 48 percent were less confident about their personal finances in the coming year. Half of British adults said they were concerned that there could be a decline in the U.K. economy.

Paul Martin, U.K. head of retail at KPMG, which sponsored and administrated the BRC survey, pointed out that flat growth was obtained in December although some retailers were “desperately attempting to generate sales through slashed pricing.” He noted that there continued to be a contrast in the performance of brick-and-mortar retailers and e-commerce in December, even though the growth in online sales did slow down in 2018.

Helen Dickinson, the BRC's chief executive, noted that British retailers are facing a further rise in taxation this year while the overall economy will have to tackle the possibility that the U.K. will leave the European Union without striking a deal on its future relationship with its European partners.

A British footwear industry official noted that, despite the uncertainty about Brexit and the general economy, his countrymen have continued to spend more money on “experiences” like going to pubs and restaurants.

Meanwhile, there are growing indications of an economic slowdown also in the rest of Europe. Preliminary data released by the German statistics office, Destatis, show that Germany is also slowing down. For the whole of 2018, the country's gross domestic product (GDP) was up by 1.5 percent, on a price-adjusted basis, compared with a 2.2 percent increase in each of the two previous years, marking the weakest economic expansion since 2013. Data for the sole fourth quarter were not yet available, but the economy is expected to have increased slightly.

Against this somber macro-economic backdrop, German shoe retailers are estimated to have recorded an overall decrease of 2 percent in their sales in real terms in the first 11 months of 2018, according to the German Retail Research Institute. Unseasonably warm weather affected their sales in September and October. November showed an increase year-on-year, but the month of December was apparently not good.

In France, the Central Bank estimated that fourth-quarter GDP rose by 0.2 percent from the previous quarter as the economy – particularly retailers – was affected by the anti-government protests of the so-called “yellow vests.” The Bank of France halved its initial prediction of a 0.4 percent increase in the final quarter of last year. Curiously, however, its statistics for the retail sector showed a sales increase of 2 percent for the country's shoe retailers.

Italy, the third-largest economy in the eurozone after Germany and France, is also suffering from a significant slowdown in growth, with its GDP now seen rising by only 0.3 percent in 2019, according Oxford Economics, which trimmed an already insipid growth forecast of 0.4 percent released in December. In 2018, Italy's GDP is estimated to have increased by 0.9 percent, it said.

The difficult market situation in the European shoe sector was reflected in the statements made by several industry officials at the recent Expo Riva Schuh show in Italy, the first one where they showed their products for the autumn/winter 2019/20 season.

Bart van Helvoirt, co-founder and chief executive of Unlimited Footwear Group (UFG), the Dutch group known for the BullBoxer, Rehab Footwear, Supertrash and Gaastra brands, felt that the year 2018 was one of the worst in a decade for its brick-and-mortar clients and that even e-tailers took it on the chin in the fourth quarter.

Park Exports, an Indian manufacturer that focuses on the low-priced segment of the European market, noticed a decline in demand for men's footwear, prompting it to resume the production of women's shoes that it had dropped in 2008, which addresses the same clients. It attributed the decrease in footwear consumption to lower disposable income in the region and a change in buying patterns.

The company has also weeded out smaller accounts to concentrate on large orders to obtain maximum economies of scale. Better procurement conditions allowed it to cut its own prices.

Park Exports' production is entirely exported. Germany, Austria and Switzerland absorb about three-quarters of its output. Its other main markets are the U.K., Spain and Poland. The company typically works with large footwear chains and hypermarkets that sell its shoes at €30-120 a pair.