How Legalizing Marijuana Could Hurt Shoe Sales
The shoe business could face some very blunt news.
Retailers based in California on Monday began to deal with a new potential threat: the legalization of marijuana.
One industry expert said the shift of consumers’ discretionary dollars is likely to harm footwear sales, in particular, sneakers.
“Studies show marijuana sales could reach $50 billion in the U.S.,” said Matt Powell, senior industry advisor at The NPD Group Inc. “When a new business of this magnitude comes online, it takes discretionary spending out of every industry.”
California residents voted to legalize cannabis sales to adults 21 and older through Proposition 64 in the nation’s most populated state in 2016.
The Golden State is the sixth state to approve the sale of recreational marijuana — medical uses has existed for nearly two decades — joining Colorado, Washington, Oregon, Alaska and Nevada. Other states such as Massachusetts are expected to start legally selling weed later this year.
While it is too early to tell just how much money could potentially go toward the so-called marijuana economy, Powell said the footwear and apparel industries have contended with new need-now items before.
“Young people, in particular, tend to be early adopters of new things in the marketplace,” he said. “My sense is that this cohort would be hurt harder.”
In particular, he said, the introduction of gadgets such as the iPhone, Netflix and other technologies all previously vied for consumers’ funds.
“But my gut is that this is not good news for the footwear industry, that’s for sure. It’s going to have a huge impact,” said Powell. “If you spend money on one thing, it’s money you don’t have to spend on something else. And your average 25 year old already has so many expenses before they leave the home: student loans, car payments, Amazon Prime. That’s a significant portion of their income. They’re already committed to those payments.”
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