Shoe companies are bracing for a challenging first half in 2026.
According to a Q4 2025 Shoe Executive Business Survey by the Distributors and Retailers of America (FDRA), higher landed costs for imports as well as other impact from tariff-related pressures are key concerns entering 2026. The survey also confirms marketplace rumblings from September that the full cost of the tariff increases are only now just starting to filter through the footwear industry and its supply chains.
Forty-four percent of respondents expect their landed costs to rise between 1 and 10 percent over the next 12 months, while 25.5 percent think the costs will rise 11 percent to 20 percent. Another 4.3 percent thought the landed costs could be as high as more than 20 percent. And with higher logistics and sourcing costs, the impact from the higher tariffs on footwear will likely result in retail price increases. Among the survey respondents, 23.4 percent said prices could rise between 1 percent and 5 percent, while 29.8 percent said the hikes could be as much as 6 percent to 10 percent. And another 14.9 percent predicted price spikes of more than 10 percent.
But another 12.8 percent see no change in either their average landed cost over the next year or in expectations for a retail price increase.
“Our 2025 Q4 survey reinforces what we’ve been hearing privately for months. The full cost of the tariff increases has not yet hit the industry, and executives are beginning to model significantly higher landed costs for 2026,” said FDRA president and CEO Matt Priest.
Footwear firms were able to pull forward their inventory receipts last year to hedge against rising costs and possible supply chain disruptions. But those opportunities have ended. And with inflation continuing to influence consumer behavior, executives now have concerns over the sustainability of pricing strategies over the course of the year.
Even though more than half of respondents still see weaker prospects for both the economy and for shoe shoppers, their six-month outlooks for both gauges “improved to the brightest in a year,” according to FDRA data points. Even better, 45.8 percent in the fourth quarter said their company sales are higher versus six months ago, and nearly half expect their company sales to increase over the next six months.
And with front loading no longer a strategy, many respondents said their inventories have declined from where they were six months ago, with expectations of a continued decrease over the next six months. That could work to their benefit as less inventory could translate to fewer discounts and better margins that set the stage for a healthier bottom line.
In other data points, 69.2 percent of respondents don’t expect to increase or decrease their hiring over the next six months. But if they do need to add to their staffing, a record three in four respondents said they have had no difficulty in finding workers to hire.
As for expectations, government uncertainties over taxes, duties and regulations represent the biggest share of concern, followed by new consumer behavior shifts.
Comments from respondents include the possibility of consumers pulling back, resulting in a contraction of the market and one survey participant noting that all shoe firms will be “playing a market share game.”
Another said: “The strong manufacturers will get stronger, the weaker will get weaker. The gap between the two will get wider.” One expressed concern that the “heavy discounting for holiday” continues until spring. And as for trends, a respondent suggested the return of brown and black shoes, as well as boots and dress shoes, with the traditional family channel shifting inventories to focus more on non-athletic from athletic.
