Retail Takeaways, Category Losers and Smart Decisions

 

Read on for the latest insights into retail sales performance in the UK golf industry.  A new article by Phil Barnard. 

At the start of this year, we thought that the market might be down on 2023: 1-2% if things were positive and 3-4% if it didn’t stop raining. This was largely in anticipation of two big sporting events - the European Football championship and Olympics - which tend to distract golfers and bring about a dip in the number of people playing the game.

At the end of August, the UK market was down -1.8% year to date for retail sales – not a bad result and it could easily have been worse.

During August, things were better on the weather-front and we see evidence of this in an increase in sales of consumables, in particular balls, which were up +10%, and gloves, up +4% in units through the On Course channel.

 

Weather Summary

Looking at the weather stats, August wasn’t a bad month for temperature and sunshine.  Rain was up +10% and rain days +5% but, given the last few months, it didn’t feel too bad.  Despite the rain, the weather this year has been better than 2023 and we had one day’s extra play in August vs the same time last year.

 

Retail Sales Key Takeaways

During August, the off-course channel performed better than on-course stores. In fact, year to date, the on-course channel is down -4%.

August was up 2.3% on overall retail sales v 2023, so a good month for revenue and a good sign after a slow July.

Consumables including balls, gloves, hats and shirts all saw an increase in sales in on-course shops during August, which is a good indication of play.  However, the two biggest categories, Woods and Irons, performed badly – proof that while people were out playing, they weren’t spending!

 

1. On-course, irons were down -16% on 2023, -13% vs 2022 and, year to date, almost -7% - proving that the tsunami of iron sales has levelled off.
2. The woods category is down -3% year to date and about level with 2022.

 

Category Calamity, or Calm?

Across the golf industry, the average retail spend is fairly consistent year on year. What changes the most is where golfers spend their money, and this tends to be more challenging to predict.

Year to date, nine categories are up in sales and 10 are down.  When it comes to total value, the critical thing is that the two biggest categories, woods and irons, are down by about -10%.  While significant, as always, we must look at possible reasons to understand the bigger picture.

 

1. Post-Covid, golfers had more money in their pockets and bought new irons earlier than they probably would have done.  Instead of waiting seven years for a new set of irons, they purchased new irons 3-4 years earlier.  While this was good at the time, it has brought forward the buying cycle and delayed when golfers are likely to buy again. This is certainly effecting sales now.
2. After falling by 75% in 2020, travel is now back to pre-pandemic levels. There was an expectation that travel would increase by +10% this year, raising the question of how much people are spending on their holidays post-Covid. This could also be affecting sales of higher value products such as Woods and Irons.

 

Market Facts for Smart Decisions

Some retailers are complaining because they listened to suppliers who predicted an increase of sales of +10%, and made buying decisions across all their brands on the back of this.

Yes, a brand could say it was going to increase sales this year but the flow of the market dictates that if one supplier is up, another will be down.

Any retailer predicting a 10% increase this year was being optimistic – it isn’t unachievable, but you would have to implement significant changes to create that kind of growth in the current market.

I’m hoping for a better year in 2025.  Hopefully, the weather cycle will be kinder and we already know we won’t have two major sporting events to distract people - although there is still substantial doubt around the economy and world events.

 

Planning for 2025

Smart buying is about taking responsibility for your own decision making. It’s key to be mindful of the bigger picture, what is going on externally and what you can impact. Most retailers should be confident enough to order 80% of their stock ahead to get the best prices. This leaves them final 20% to allow for deals and market changes.

Some golf retailers thought all the brands would grow this year. When planning ahead, be focussed when it comes to choosing brands to work with and don’t spread yourself too thin.  Use your Xpos reports to highlight the brands that give you the biggest cash margin and least leftover stock, and use the Circana/Datatec Retail Audit reports (see below to sign up) for a monthly market update.  These reports highlight the market events outside of your business, such as best performing products, which will help you to better manage what happens inside.

 

Golf industry and data expert, PHIL BARNARD, is founder of Xpos and Vice President of Golf Datatech, a Circana company.  Xpos retailers can sign up for free to monthly Datatec audit reports for up to date market insights product and brand sales trajectories and best performing products. Email phil.barnard@golf-datatech.com