Rising unemployment among young people in the UK is stifling sales growth and profits at JD Sports Fashion, the retail group has confirmed, casting a shadow over its financial outlook.
The UK emerged as the most challenging market for the JD Group, which also owns outdoor specialists Blacks and Go Outdoors alongside a portfolio of US and European sports chains.
Consumer Pressures and Economic Headwinds
Chief Executive Régis Schultz pointed to significant "pressures on our core customer demographic", specifically citing rising unemployment levels and unpredictable consumer sentiment. This warning coincided with the release of official data showing the number of 16- to 24-year-olds not in education, employment, or training (Neet) remains persistently high.
Despite a slight decrease to 946,000 in the three months to September, down from 948,000 the previous quarter, the figures from the Office for National Statistics indicate that nearly one in eight young people are classified as Neet. Campaigners have expressed deep concern, stating Britain risks failing an entire generation.
Barry Fletcher, CEO of the Youth Futures Foundation, emphasised the severity of the issue, calling it a "long-term problem that continues to negatively shape the lives of too many across the country."
Direct Impact on Retail Performance
The financial squeeze on young consumers directly translated into a 3.3% decline in sales at established JD Group stores in the UK for the quarter ending 1 November. The company also experienced sales dips in the US (1.7%) and EU (1.1%), attributed to similar economic pressures, a lack of compelling new product launches, and a fading trend for women's vintage trainers.
Compounding these issues is the group's heavy reliance on supplier Nike, which has itself faced criticism for a lack of innovation failing to ignite consumer interest.
As a result of these challenging conditions, JD Sports stated that its annual pre-tax profit is now expected to be at the lower end of expectations, around £853 million, a figure substantially below the £1 billion once hoped for. The company described its approach as "pragmatic" given the recent deterioration in macroeconomic and consumer indicators.
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, noted the particular weakness in UK trading, adding that "recent changes to employer taxes and minimum wages" have introduced additional costs and challenges for the business.
A Wider Trend of Consumer Caution
The struggles are not isolated to JD Sports. The bootmaker Dr Martens also reported that consumers are "cautious right now" and "looking for deals" across both Europe and the US, signalling a broader trend of tightened spending among younger demographics.
