If I’d been sitting here a year ago, about to write this, I don’t think my imagination could have possibly created the events that eventually unfolded. I’m pretty sure I would have been focusing on the effects of the upcoming Brexit deal, changes in the high street and consumer shopping behaviour. Most likely, I will have talked about the impact of weather on the golf market. Nothing had more impact than the pandemic last year but before we look at 2021, let’s take a quick look back.
Initially, Covid-19 had a devastating impact on the golf market. By the end of the first lockdown in May. retail sales had shrunk by 54% in value. Unsurprisingly, that’s the biggest drop we’ve ever seen. In May I was somewhat worried about the predictions I had made back in February in a room of 200 golf professionals – “the golf market is very resilient. It never changes more than plus or minus 10%”. I was starting to feel a bit daft.
Then, doors opened and the sun shone. Everyone, and I mean everyone, wanted to get out and play a ‘safe’ sport. As a result, golf witnessed an amazing turnaround in the second half of the year. Rounds were up, memberships were up and golf retail had a storming second-half jump. The Club category was up by over 44%. All things considered, the picture looked quite good at the end of 2020, well with the overall golf retail market down by 10.7%.
Despite the impact of the virus, I hadn’t been that far off back in February. Golf is truly resilient.
Covid-19 still has us in its grips and the home nations find themselves in differing states of lockdown. Lockdown 3.0 seems to be here for a while and it looks like Golf will be closed until the middle of February, or even into March. Golf enjoyed an early reprieve after the first lockdown so let’s hope that happens again. One key difference this time around, is that we have a vaccine that’s being rolled out at a rapid rate.
Sadly, we’ll still see a hit on the initial sales figures but dropping numbers in January and February is much better than April, which, in terms of sales, is always bigger than the first 2 months combined. With this in mind, we should hope the sales figures return to a slightly more normal pattern.
By the end of the first lockdown in May. retail sales had shrunk by 54% in value. Unsurprisingly, that’s the biggest drop we’ve ever seen.
Given the momentum in Golf in the second part of 2020, we should use this time in lockdown to plan for the year ahead. Despite the bad start to 2021, there are opportunities to see some growth this year. We had a lot of new, and returning, golfers fall in love with the game last year, so there should be a big drive to ensure they stay connected and continue to play, and spend. Clubs and retailers must plan to cater for beginners looking to trade up or take the plunge with some new kit.
Another reason for last year’s decline was due to insufficient stock in the trade.
With fewer sales, we would have expected excess stock to pile up but this wasn’t the case. Orders were cancelled early and, with the ensuring boom in the sport, shops were short of stock. One of the effects of Covid-19 was to throttle Chinese production. Hopefully this won’t be a problem this year although Brexit may cause some supply issues. Products from abroad may be affected as they take more time to come through the border. In addition, retailers who previously profited from selling to the EU, may now see numbers of EU customers reduce due to added tax complications.
Home or Away
Another consequence of both Covid-19 and Brexit is the restriction on people’s travel plans.
While travel will probably be up on last year, the Staycation is likely to be the preferred choice for many travellers. This will be good for some and bad for others. Once again, destination courses and resorts may well struggle with the lack of foreign visitors, especially from the US. Apparel sales in this category were decimated last year and contributed to the poor performance of the Apparel category. This may well be the case again. Other courses however should prosper, as golfers have more to spend in the UK, instead of hotels and flights.
With Brexit and the pandemic comes the economic uncertainty. How will the economy recover and how are we going to pay back the huge bills that have been created? I hope the government will do the sensible thing and redress the taxation system to level up the playing field for online and offline retailers. Business rates, as they stand, are just not fair.
We’ve seen online retail taking an increasing share of consumer spend over the last decade and studies have shown that the pandemic has accelerated that change by 5 years.
Highstreets have been decimated and, very sadly, even more retailers have gone out of business than in previous years. The pandemic stacked everything against the high street - you couldn’t go to the store so you had to buy online – and now e-commerce is thriving.
How might the future look now? There have been suggestions that e-commerce will continue to grow at a rapid rate. But I’m not so sure.
During Covid-19, consumers have been forced to buy online as there was no other option. Surely, the next response is for a return to the high street? Initially, enforced home working was greeted with enthusiasm. What’s more, the new working environment made online purchasing easier as everyone was at home to receive their orders. However, after a year of Zoom and Teams calls, there seems to be a desire to get back to the office. In June 2020, a survey showed that 90% of people wanted to carry on working from home. Roll that on 5 months and 2 recent studies have suggested that between 75 and 90% now want to return to the office. It seems that while everyone would like a more flexible arrangement to allow for some home working, most people miss the social aspects of the office, as well as the focus it can help provide.
Working from home for extended periods seems have lost its shine, with stress and isolation seen as a major downside. For nearly 75% of us, shopping is one of our main leisure activities: there’s only so much you can do on a screen. With an eventual return to offices, I think we can anticipate a revival of the high street.
Whatever happens in the future, the basics still apply and customers will continue to look for value and service. Retailers must focus on their customer, stock sensibly and be in a position to respond to whatever this year throws at us.