Nike's price increase controversy: Is It a reluctant move under cost pressure or a brilliant strategic layout of the brand?

According to Reuters, during the earnings call for the third quarter of 2025 held recently, Nike announced a highly anticipated strategic adjustment: Starting from the fiscal year 2026, the brand will gradually increase the prices of its core products globally, mainly covering its best-selling Air Max, Jordan series of sports shoes and some clothing. Behind this decision lies the dual pressure of rising supply chain costs and the continuous increase in R&D investment. According to Nike, the price increase is expected to be between 3% and 10%, and it will strategically prioritize the high-end and limited edition markets, aiming to maintain its gross margin and brand scarcity. Nike's CEO John Donahoe said that this move aims to "take advantage of the continuously growing global consumer demand for high-end sports shoes, ensuring the adjustment of the product structure while consolidating Nike's share in the global market."

This series of business moves undoubtedly reveals Nike's response strategy in the current complex market environment. From a business perspective, the cost pressure Nike is facing cannot be resolved overnight. The fluctuations in the global supply chain after the pandemic and the general increase in raw material prices have had a profound impact on the manufacturing industry. As a globally leading sports goods brand, Nike's supply chain spreads all over the world. From raw material procurement to finished product manufacturing, every link is affected by changes in the international market. Therefore, the pressure of rising costs is eventually passed on to the end products, leading to price hikes. This is understandable from a business logic perspective.

However, Nike's decision to focus its price hikes on the high-end and limited edition markets reveals more complex business considerations behind this strategy. The high-end market has always been an important source of brand premium. Consumers have a higher willingness to pay for high-end goods and are relatively less sensitive to price changes. Nike's move is undoubtedly taking advantage of this market characteristic and aiming to further enhance its profitability through price hikes. Meanwhile, limited edition products have a higher market value due to their scarcity. Raising prices will not weaken their market competitiveness; instead, it may further stimulate consumers' purchasing desire.

From the perspective of brand strategy, Nike's move is also aimed at strengthening its high-end brand image. Against the backdrop of increasingly fierce competition in the global sports goods market, brand scarcity has become the goal that all major brands are vying to pursue. Nike has not only enhanced the market value of its products but also consolidated its market position to a certain extent through price hikes and limited production strategies. However, this strategy also has potential risks. On the one hand, excessively high prices may dampen the purchasing intentions of some consumers, leading to the loss of market share. On the other hand, if the supply of limited edition products fails to meet market demand, it may trigger consumer dissatisfaction and negative public opinion, causing damage to the brand image.

In addition to price adjustments, Nike also announced that it will expand its direct retail network in core markets in Southeast Asia and North America. This move is undoubtedly aimed at better controlling the sales channels and enhancing brand influence. The expansion of its direct retail network not only helps Nike understand market demands and consumer preferences more directly, but also reduces intermediate links to a certain extent and improves operational efficiency. However, this also requires Nike to invest a large amount of funds and human resources in various aspects of work such as store location selection, decoration, and operation. How to maintain the stability of profitability during the expansion process will be a major challenge for Nike.

Overall, the series of business measures announced by Nike during its Q3 2025 earnings call not only demonstrate its flexibility and foresight in responding to cost pressures and market changes, but also reflect its long-term plans in brand building, market expansion and sustainable development. However, the implementation effects and potential risks of these measures still need to be tested by time and the market. How Nike can maintain its brand competitiveness and profitability while achieving sustainable development and social responsibility goals will be an important issue that it needs to constantly explore and answer in its future development.