Foot Locker is in a bad way right now and shows in more ways than one. Not only did their stock take a monstrous 27% dip in May of this year, but their Q2 earnings report revealed a 9.9% decline in total sales. This announcement obviously scared the markets and led to another decline in share price to the tune of nearly 30%.
If the numbers don't scare you, then the verbiage behind them should. The brand blamed the decrease in revenue on “ongoing consumer softness.” This is scary and shameful. The economy in the United States is in rather rough shape; interest rates are double what they were just three years ago, and inflation has caused prices to skyrocket on everything from gas to groceries, yet the Foot Locker brass thought it wise to call consumers “soft” for not buying more sneakers.
It is no secret that consumers are giving more thought to where to spend their dwindling disposable income. Given the financial landscape in this country, it's reasonable to think that consumers have better places to spend their money than Foot Locker. While the overall sneaker market is changing, Foot Locker is slower to adapt than most. One of their biggest competitors, JD Sports, recently announced a plan to open 1,750 more retail locations across the globe, so clearly, there are ways to succeed in today's landscape. When
Foot Locker retooled their reservation system which actually made it easier for bots to take stock. Meanwhile, JD introduced an Exclusive Access program that is virtually bot-proof, which may have curried some favor with consumers as their business model is thriving.
Blaming the consumers is a very bad look for Foot Locker, perhaps even catastrophic. If they don't take a long, hard look in the mirror and figure out how to evolve in today's landscape, they may be left in the dust. The ball is in your court, Foot Locker.
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