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SGMA Reveals Sports/Fitness Industry Is Steady, Strong & Evolving

Date: 6/12/12

Strong Sales In Sports Apparel & Athletic Footwear Boost Industry Performance

SILVER SPRING, MD – June 12, 2012 – In 2011, U.S. wholesale sales of sporting goods equipment, sports apparel, licensed merchandise, athletic footwear, and fitness equipment were $77.3 billion – according to the Sporting Goods Manufacturers Association’s (SGMA) State of the Industry Report (2012).  That was a 4.2% increase over 2010, when sales were $74.2 billion.  This boost in sales indicates the second straight year that the sporting goods and fitness industry has shown signs that it is ‘on the comeback trail’.  It’s the first time since 2007 that the industry’s wholesale sales reached $77 billion.  And, the sporting goods industry, for the second straight year, outperformed GDP in the US.

The ‘hot’ categories in the industry which drove this growth were branded activewear (up 9.6%), golf clubs (up 8.9%), running footwear (up 7.6%), elliptical machines (up 7.1%), outdoor/adventure footwear (up 6.1%), classics/originals footwear (up 5.6%), and performance apparel – tops (up 5.4%).

One of the leading industry business topics is mass customization where manufacturers are producing customized, quick-turnaround gear for the consumer.  And, there are two types of mass customization:  for performance (fitness) and for style (personalization).

Consumer Spending Trends

In this report, SGMA surveyed 13 categories of consumer spending.  Of those 13 categories, six of them revealed higher consumer spending in 2011 than in 2010.  The top two categories that exhibited the highest percentage of ‘more consumer spending’ were Lessons, Instructions, & Camps and Team Sports at School.  Of those consumers who spent money on the former, nearly 25% of those consumers said they spent more in 2011 than in 2010.  As for the latter, just more than 22% of those consumers said they spent more in 2011 than in 2010.  The category which had the least amount of change, where consumers kept their spending steady, was Tennis Membership Fees, where 71% of those who spent money on tennis memberships in 2010 actually spent the same amount of money in 2011.

“It’s not surprising that team sports had a big jump in spending because it means that parents are making the athletic needs of their children a high priority,” said SGMA President Tom Cove.  “Team sports are the heart and soul of athletic competition in the U.S.”

It’s worth noting that in seven of the 13 categories, more than 20% of the consumers from those various categories expect to spend more this year than in 2011.

“The growth and/or emergence of sports such as gymnastics, rugby, lacrosse, and field hockey are helping to fuel this spending,” noted Cove.

Sports & Fitness Participation

The state of fitness and activity in the U.S. is an ever-changing situation.  The good news is that 217 million Americans are considered ‘active,’ yet more than 68 million Americans are totally ‘inactive’ – for any number of reasons such as age, illness, little interest, lack of access to facilities, or minimal ability.  Listed below are some of the other noteworthy facts and figures on sports participation in the U.S.

  1. Group Fitness.  Yoga, boot-camp style training, and class-based fitness classes are the main growth categories in the fitness industry.
  2. Amazing But True.  In 2011, 18-24 year-olds were more inactive than 25-34 year-olds and 35-44 year-olds.
  3. Best in the West.  Utah and Idaho are the two states with the highest rates of physical activity per capita.
  4. Older and More Active.  ‘Baby Boomers’ (those born between 1945 and 1964) are more interested in fitness activities and outdoor sports than Generation X (those born between 1965 and 1979).
  5. Voters Are Active.  Those who are physically active are more likely to vote in the Presidential elections this coming November than those who are not physically active.

E-Commerce Continues To Expand

According to WebScore Analytics, e-commerce sales in the U.S. for all industries in 2011 reached $185 billion, which was a 14% increase over sales in 2010.  E-commerce sales are expected to reach $270 billion by 2015.  In the U.S. sporting goods industry, e-commerce sales in 2011 were $2.1 billion and they are expected to reach $4.9 billion by 2015.

As a percentage of overall sporting goods industry sales in the U.S., e-commerce sales continue to play a bigger role.  The percentages have continued to increase every year since 2006 – rising from 3.6% in 2006 to 6.2% in 2011.

“The increasing availability of mobile and tablet-type devices makes e-commerce purchases more possible and accessible,” commented Cove.

Of the 91 industry leaders surveyed by SGMA, nearly 60% of the companies represented in the survey said they sell directly to the consumer.  And, of those companies that do not sell direct to consumers, nearly 70% of them plan to start selling directly to consumers this year.

‘Short Takes’ & ‘Snapshots’

The future of the entire sports, fitness, and recreation industry in the U.S. is filled with optimism based on the input from industry leaders:

  1. 84% of those surveyed by SGMA (manufacturers and retailers) are expecting domestic sales to increase in 2012 vs. 2011.
  2. 61% of those surveyed by SGMA (manufacturers and retailers) are expecting international sales to increase in 2012 vs. 2011.
  3. 40% of the manufacturers surveyed indicate they will need ‘more manufacturing capacity’ this year.
  4. 16% of the manufacturers surveyed said they planned to manufacture more products in the U.S. this year and 18% stated they planned to manufacture more products overseas.

Sports/Fitness Industry’s Biggest Concerns

The five leading business concerns for the sporting goods and fitness industry in the U.S. are (1) increasing market share, (2) material cost/availability, (3) slower consumer spending, (4) product sourcing, and (5) lack of consumer confidence.
 
SGMA Speaks With Influential Industry Leaders

Earlier this year, SGMA spoke with U.S. Olympic Committee CEO Scott Blackmun and National Federation of State High School Associations Executive Director Bob Gardner about the state of Olympic sports and high school sports, respectively.

When asked to compare the upcoming Olympic experience in London with the 2008 Summer Olympic Games in Beijing, Blackmun said, “Interest in London is high because of our special relationship with that country.  China was more mysterious.”

Blackmun is also quick to speak about the disappointment that (women’s fast-pitch) softball is no longer an Olympic sport, “I am very disappointed that women’s softball was removed from the program.  It was an opportunity for these women to have an event of worldwide significance.  Softball needs the Olympic Games.”

Two sports which have a chance of being included in the future are 3-on-3 basketball and skateboarding.  “Skateboarding could do for the Summer Olympics what snowboarding did for the Winter Olympics,” said Blackmun.

During SGMA’s conversation with Gardner, he noted that overall participation in high school sports has risen every year since 1989.  He noted that the percentage increase in participation in high school sports since 2000 has grown at a faster rate than the overall growth in the U.S. population. 

Two other issues which are impacting interest in high school sports are pay-for-play and concussions. 

While the pay-for-play issue is a concern, “more schools have turned to outside dollars” which is a way to reduce the financial burden on families with limited means.  Also, these types of sponsorships represent “just another way to channel funds back to high schools.”

As for concussions, Gardner says, “We’ve seen concussions dramatically rise, but we don’t think concussions are up as much as the reporting of concussions is up.  The big concern is the second impact -- that they (the athletes) don’t return to competition too soon.”

What’s Happening on Capitol Hill

The SGMA focuses on four public policy areas at the federal level:  Physical Activity Promotion, Enhanced Trade, Protection of Intellectual Property and Reasonable Regulation.

Since Fiscal Year 2001, SGMA has been successful every year in getting the Carol M. White Physical Education Program (PEP) passed which supports quality, daily physical education in schools.  To date, nearly $800 million in PEP grants have been distributed across the country to schools and aftercare programs by the U.S. Department of Education.

SGMA continues to support the PHIT (Personal Health Investment Today) Act.  Right now, this legislation has the support of 20 members of the U.S. House of Representatives.  If PHIT were passed, activity related expenses could be deducted or paid for using pre-tax medical dollars.

This year, the sporting goods industry has had some notable successes working with the federal government’s Intellectual Property Rights Center, which has successfully shut down some rogue websites trafficking in counterfeit goods.

The SGMA is pursuing any opportunity to lower the cost of importing and exporting products through targeted duty relief and Free Trade Agreements.

Following the sudden announcement recently by Congress to take up a Miscellaneous Tariff Bill later this year, SGMA lined up Congressional sponsors for bills to extend tariff relief on golf bags, volleyballs, and basketballs.  SGMA also helped generate legislation to provide new duty relief for golf club heads.

SGMA’s State of the Industry Report (2012 edition), which discusses business and participation trends within the sporting goods industry, may be obtained at www.sgma.com/reports.  It is available for free for SGMA members.  The cost of this report for non-members is $495.

The Sporting Goods Manufacturers Association (SGMA), the #1 source for sport and fitness research, is the leading global trade association of manufacturers, retailers, and marketers in the sports products industry.  SGMA helps lead the sports and fitness industries by fostering participation through research, thought leadership, product promotion, and public policy.  More information about SGMA membership and SGMA's National Health Through Fitness Day can be found at www.SGMA.com.

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