UK Golf Retail Sales: 2020 Market Overview

xpos chairman phil barnard golf retail sales 2020

Following on from my previous articles where I looked at elements of retail events during 2020,  I wanted to sign-off with a final market overview – the idea being to provide a complete picture of that very unique year.

I’ve previously said, and I’m fairly sure everyone would agree, that 2020 was a crazy year. While the lockdown affected the various regions differently, golf lost nearly 1/3rd of a year to COVID, while retail lost even more.  It really has been a bumpy ride. We were in the doldrums in May with retail sales year to date down 54% in value. However, a resurgence in popularity, due to its COVID compliance, saw golfers, new and old, loving the game and spending their money. At year end, the speciality golf channel recovered to be only 10% down on the previous year.

As with many things, the headlines don’t give you the whole picture. The second half of 2020 was up 24%  in value versus 2019. On- and off-course retailers saw a very different split. Online did incredibly well, driving the off-course channel up 43% in the second half of the year, compared to just 10% for on-course. Overall, on-course ended up down -19.8%, while off-course was up by 3%. Some might have expected more, but the loss in March through June and November was a considerable hole to fill. Here’s a graph plotting the changes in total value versus the previous years.

YTD Value V last year - 2017 to 2020

How did each category fare?

The first thing to note is that there was a shift in consumer spending. Generally, Clubs did well and Clothing did not.

Ladies clothing performed worse, with all categories down in value at least 40%. Next was men’s clothing, (with shirts at the bottom of the pile), followed by tops and then bottoms. As previously discussed, much of this drop appears to be down to social distancing rules, especially for on-course shops, where it was hard to browse and try on clothing. Retailers and customers seem to have been nervous and consumers just opted to leave the clothing on the rack. Off-course apparel numbers were up considerably in the second half of the year – but this still didn’t compensate for the loss in on-course. Customers obviously felt more comfortable ordering clothing to try on at home. Shoes also had a very “off par” year, I think suffering from the same issues as apparel, they were hard to try on in the on-course shops so customers made their purchases online, or not at all. Here’s a graph of the categories we track and the end of year value change v 2019.

 

Clubs did well: irons and wedges were up for the year, which was an amazing result. It should be noted that club packs are not included in these sales. We are running a separate study on these so we can report how well they did. By all accounts, they sold out so the numbers should be impressive. Woods and putters were down for the year. Other categories that saw growth were bnags and distance devices, with the latter being the largest growing category of the year in value.

Trolleys may well have been in a positive position if it hadn’t been for stocking issues with the brands. Cancelled early orders mess up the supply chain and deliveries from abroad just couldn’t keep up with demand and many sales were lost.

The only surprise for me was consumables: balls and gloves, neither of which did as well as I might have expected. Rounds were up for the year but the sales of these categories didn’t reflect this. I think perhaps some sales might have gone out of channel – away from the speciality category and towards the mass merchants. During lockdown I think golfers were adding a dozen balls to their Amazon basket, along with their batteries, books and anything else they were ordering. I also have a hunch that the mix of golfers this year had an effect on sales. Did all the regular and club members play as much golf this year or did some stay at home and isolate? Was proportionally more of the increase in rounds from new, or returning, golfers who perhaps have different purchasing habits? Finally, with no tourists visiting from abroad, did this effect consumables. I have a feeling that for many of the destination courses, traveling visitors would usually pick up an extra glove or a packet of balls to top up the bag. This didn’t happen this year. So while clothing was decimated by this, I think consumables also took a hit. Some food for thought.

Units: Have customers really bought more in any of the categories?

In a word, no! With the exception of wedges, that were very slightly up, all categories are down. With the clothing categories faring worse. Interestingly, for a couple of categories, the drop in units is less than the drop in value. Shirts, tops and balls all performed better in units, than value – showing that, perhaps, consumers were opting for lower cost items. However you look at it, units were well down overall. Here’s a graph of unit change versus 2019.

 

 

Overall the units drop probably came as a result of lost playing time and suggests that gains in rounds played were concentrated among fewer people: more golfers playing more, instead of more golfers overall. Again, something to think through.

With a drop in Units, was there much discounting? Did pricing drop?

Looking at the ASP’s, its clear to see that all the main categories maintained pricing and, in most cases, increased quite considerably. Many hardware categories saw ASP growth of 10%+. This is probably a combination of newly priced product but also a lack of clearance brought by the lack of stock. Retailers didn’t need to clear their shelves towards the end of the season as customers were still buying and stock was relatively low. Here is a graph of ASP versus 2019.

 

The only area to really see a drop, was clothing. In the main, this was due to the lack of tourist sales. Most branded destination stores sell higher-priced branded product. This just didn’t happen in 2020 and, as a result, the clothing that was sold was lower-priced brands. This doesn’t mean that product was discounted – it was just a different brand mix that changed the ASP.

With units down, was there an inventory build?

The simple answer was No. Many retailers, obviously nervous about the effects of the pandemic, cancelled orders straight off the bat at the beginning of the season. As a result, at the start of the boom – around the middle of June – inventories were down between 5 and 55% on the year before. That’s an incredible drop. This may have starved many stores of vital new stock and ended up curtailing their sales.

Looking at stock turns, all the high-selling items increased in turn. Eventually the low sales in apparel decreased the turns and even though the end of year, stock position was low and, in some apparel categories, down over 30%

One anomaly was outerwear. The category’s unit sales were relatively strong and it saw a drop in inventory in the trade of circa 30%

 

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