Sneakerology co-owner Ira Penziner says the retailer's suppliers have warned...

Sneakerology co-owner Ira Penziner says the retailer's suppliers have warned that supply chain issues will continue through next year "because of factories being closed."  Credit: Newsday/J. Conrad Williams Jr.

The 2020 back-to-school shopping season was the worst in Sneakerology’s history. Kids attending classes virtually from home due to the COVID pandemic could do so barefoot if they wanted to.

The owners of the 12-year-old business with two stores, in Manhasset and Greenvale, hoped students’ return to in-person classes in August and this month would mean a return to pre-pandemic buying numbers.

Sales have improved but are being stymied by another culprit – supply chain issues.

The delays in getting merchandise in stores and the resulting rising prices that consumers are paying aren’t going away anytime soon, and the back-to-school shopping season was extended for weeks as parents returned to stores to find items that weren't available earlier, retail experts said.

"A lot of the companies warned us it’s going to be tough through next year because of factories being closed," said Ira Penziner, a co-owner of Sneakerology.

Nationwide, retailers are contending with unprecedented supply chain issues as goods-producing factories worldwide undergo work shutdowns because of the pandemic. "It boils down to high demand, not enough capacity to meet that demand and we basically are trying to restock America after going through the height of COVID in 2020," said Matt Priest, president and chief executive officer of the Footwear Distributors & Retailers of America in Washington, D.C.

Stimulus payments Americans received also fueled demand, he said.

Imports are 99%

Clothing and shoe factories in Vietnam and southern China have had multiple weeks of shutdowns that halted production. Imports account for 99% of shoes sold in America, Priest said.

Another factor in the shortages is manufacturers’ freight costs rising to historic levels, he said.

Shipping rates for 40-foot containers that averaged $2,500 to $3,000 last year are now at $18,000 to $20,000, said Nate Herman, senior vice president of policy for the American Apparel & Footwear Association in Washington, D.C.

On Sept. 17, the weekly Shanghai Containerized Freight Index, the most widely used index for sea freight rates for imports from China, rose 1.2% to a record $4,622.51 for a 20-foot container, according to the association. This rate is about four times that of a year ago.

More costs are being injected into the supply chain, but companies willing to pay the higher costs still can’t get their goods delivered because carriers aren’t honoring the contracts, said Steve Lamar, president and chief executive officer of the American Apparel & Footwear Association.

"Where this is translating to is either empty store shelves, so goods shortages … or higher prices," he said.

Price spikes

From June to August, the average price of shoes was 17% higher than during the same time last year and 9% higher than in 2019, according to the NPD Group, a Port Washington-based market research group.

Bookbag prices were 20% to 30% higher in some areas this back-to-school season compared to the same period last year, Herman said.

Customers paid 6% to 7% more overall for back-to-school purchases this year, he said.

"It will probably continue to get worse for the holiday season," he said.

Sneakerology is not raising its prices despite its shipping costs increasing, Penziner said.

"We’re taking the hit. It’s not the customer," said Penziner, who said the stores’ 2020 back-to-school sales were down 15% compared to the same period in 2019.

But because of the shortages, customers have been "settling" for shoe styles that normally wouldn’t sell as well, he said.

Normally the chain’s busiest times of the year are June, because of camp season, and back-to-school time, he said. Were it not for supply chain issues, the 2021 back-to-school season would have been on par with 2019’s, he said.

Lester’s, a three-store retailer with locations in Greenvale, Manhattan and Westchester County, sells clothes and shoes for the whole family, but its target demographics are kids and teens.

Sales in most categories have returned to 2019 levels but the stores’ inventories of accessories and shoes are down "due to the supply chain issues," impacting sales, said Perry Schorr, president of the business.

Nationally, an uptick

Nationwide, the back-to-school shopping season was strong compared with the same period in 2020, partly because last year’s clothing sales were so depressed.

"Spending in a range of retail categories--electronics, clothing, furniture and general merchandise — are all performing well as students continue to replenish their wardrobes and school accessories after sitting out most of 2020," said James Bohnaker, associate director and economist in the Boston office of IHS Markit, a market information service headquartered in London.

IHS is forecasting that back-to-school retail sales will rise 11% compared to the same period in 2020, the largest annual increase since 1993.

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