March 30, 2014

Are Jordan Retail Prices Outpacing Inflation?

Yes.  But not significantly.

Sneakerheads love to lament the ever-increasing retail price of Retro Jordans.  With GR prices hitting $170 and premium versions like the 5Lab3 reaching $225, it definitely feels like prices are increasing at a quicker rate than ever before.  There have been two price hikes in the past two years alone and rumors constantly abound that more are just around the corner.  What gives?

We all inherently understand inflation.  Sneakers are not immune from the rising costs of raw materials, labor, shipping, etc.  No one expects to cop $100 retros forever.  So the question, then, is whether the retail price of Jordans is increasing faster than inflation.  Is the newly minted $170 GR price more or less than historical prices, in equivalent dollars?

To answer the question we analyzed the change in retail price for three prolific retro models (3, 5, 6) over the past 25 years.  Using the U.S. Department of Labor, Bureau of Labor Statistics Inflation Calculator we calculated the equivalent 2014 purchasing power for each of the historical prices.  The result is this chart:

Jordan Retail Inflation 032814

Key Insights:

  • The most obvious visual observation is how expensive OGs were.  $125 for Jordan 5s in 1991 is the equivalent if $225 today!  No wonder these were so groundbreaking.  At no point in history have Jordans been as expensive as they were when they came out.
  • The next obvious insight is that, besides OGs, the current $170 retail price is the most expensive.
  • BUT . . . the fact that 8 of the 12 prices between 1999 and 2013 have an equivalent value greater than $160 (the 2013 price) means that the $170 price is not significantly more expensive than it should be.  In fact, $170 is both reasonable and logical.  If the price stays at $170 for 2015 it might be exactly in line with inflation.

Conclusion:  There is nothing egregious here.  Jordan Brand might be six months to a year ahead of inflation, but Retros are still a much, much better deal than they were back in the day.  Just don’t confuse that as a blank check to keep raising prices, JB – we’re watching closely.