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SGMA Reveals Sports Industry Is ‘On The Rebound’

Date: 5/19/11

SGMA Says Sporting Goods Industry Outperforms GDP For 1st Time Since 2007
Social Networking Impacts Group Exercise……‘Niche’ Team Sports Fluorish

SILVER SPRING, MD – May 19, 2011 – In 2010, U.S. wholesale sales of sporting goods equipment, sports apparel, licensed merchandise, athletic footwear, and fitness equipment were $74.2 billion – according to the Sporting Goods Manufacturers Association’s (SGMA) State of the Industry Report (2011).  That was a 3.5% increase over 2009, when sales were $71.6 billion.  This boost in sales indicates that the sporting goods industry is ‘on the rebound’ since sales in 2009 were 4.3% less than they were in 2008.  This is the largest one-year growth swing in the sporting goods industry in nearly 20 years.  And, the sporting goods industry outperformed GDP for the first time since 2007. 

The main category in the sports products industry is athletic apparel which increased 4.8% to $29.6 billion. The second largest category is sporting goods equipment at $20.4 billion.  Athletic footwear sales were $12.6 billion.  Sports licensed merchandise sales amounted to $7.3 billion.    Fitness equipment was also strong in 2010 -- up 4.1% to $4.3 billion.  The treadmill is still the most popular piece of fitness equipment.  In athletic footwear, the running shoe remains the category leader.  Golf is the largest category under sporting goods equipment, while shirts/tops represent the top selling item under sports apparel.

“The sporting goods industry has strengthened in last 12-16 months, despite the challenges which have been presented by a number of issues such as the vagaries of the worldwide economy, federal and state legislation, sourcing and production concerns, regulations by sport governing bodies, and counterfeiting,” said SGMA President Tom Cove.  “Since 60% of SGMA member companies say they need more manufacturing capacity and will increase production by nearly 25%, chances are good that 2011 will be a strong year, as well.  Our survey also indicates that 88% of our member companies expect international sales will increase in 2011.”

‘Short Takes’ & ‘Snapshots’

There are a number of factors which are affecting the overall growth and development of the entire sports, fitness, and recreation industry:

Electronic Communication:  Manufacturers and retailers are more creative in how they reach the consumer as Twitter, Facebook, Texting, Shutterfly, RueLaLa, and Groupon are some of the ways in which marketing and advertising messages are being transmitted.

Daily Concerns:  Throughout the year, the two biggest concerns by manufacturers about the retail sector will be (1) shifting inventory risk to manufacturers and (2) emphasis on product quality.

Focused Expenditures:  More than 60% of Americans purchased fitness-related services or fitness equipment in 2010.

School Sports Spending Suffers:  According to Up2Us, more than $2 billion was cut from school sports budgets in the 2009-2010 school year.

Budgets and Expenses:  In 2010, expenses for sponsorships and player endorsements fell while spending on new product development and advertising rose.

Team Spirit Spending:  Wholesale sales of sports licensed products and merchandise rose by 5% -- from $6.9 billion in 2009 to $7.3 billion in 2010.  That increase is due to ‘pent-up’ demand and consumers’ desire to be affiliated with a favorite team or sport. 

Digital Interaction:  Since 2009, three group exercise activities (group cycling, cardio tennis and high-impact aerobics) have experienced double-digit gains in overall participation.  This growth has been driven by the ‘Generation Y’ population (ages 11-30) and its philosophy on social networking as a way to communicate and socialize. 

PE Pays Off: For today’s children, they are more than three times likely to participate in team sports if they have PE classes in school than if they don’t have PE in school.

Trends & Tendencies of Sports Participation

In team sports, there is positive news to report.  Many traditional endeavors such as outdoor soccer, indoor soccer, tackle football, baseball, basketball, cheerleading, and court volleyball have experienced small degrees of growth in ‘overall’ participation since 2009 – reversing a recent trend in the other direction…….and ‘overall’ participation in some ‘niche’ team sports activities has showcased dramatic increases since 2009.  Rugby is up 50.7%, lacrosse is up 37.7%, field hockey is up 21.8%, and beach volleyball is up 12.3%. 

World Cup Effect:  With no specific marketing program or effort geared at increasing interest in soccer, outdoor soccer participation rose by almost 3% in 2010 – mainly due to the existence of the World Cup in South Africa and TV coverage of the event.

Trendy Teams: Four team sports have had double-digit percentage increases in ‘core’ participation since 2009.  They are lacrosse (13+ times/year….up 33.1%), rugby (8+ times/year….up 20.3%), ultimate frisbee (13+ times/year….up 19.2%), and beach volleyball (13+ times/year….up 18.9%).

Road Runners:  Nearly 50 million Americans are now running and jogging to stay fit – up 12.6% from 2009.

School vs. ‘Travel:’ The top three most popular team sports in high school are basketball, tackle football, and baseball.  The top three most popular team sports for ‘travel’-sport athletes (age 14-19) are soccer, baseball, and basketball.

Electronic Stimulation:  Almost 50% of U.S. on-line customers used some type of fitness technology in the past year – according to a Consumer Electronics Association study.

Fitness Fanatics.  The three cities whose residents are considered the ‘fittest’ in the country are Salt Lake City, Utah; San Diego, California; and Austin, Texas.
Industry Interest From Capitol Hill

Based on an October 2010 article in The New York Times and the interest created by the story at the Congressional level, legislation has been drafted and introduced by Senator Tom Udall (D-NM) that would force the football helmet industry to adopt testing standards that specifically address concussions and the needs of children under 12 years of age.

Called the Children’s Sports Athletic Equipment Safety Act, the law also would strengthen the power of the Federal Trade Commission (FTC) and state attorneys general to penalize companies that make false or misleading claims about any children’s sports safety product, including headbands, mouth guards and other items. In a recent statement, Senator Udall expanded the scope of his investigation.  The bill expands beyond football helmets to address advertising for all children’s sports safety equipment, such as headbands for soccer and lacrosse eyewear. It allows the FTC to impose civil fines on manufacturers that make false or misleading claims, and empowers the state attorneys general to sue companies under the new law.  Not since the early 1960s, when CPSC interest in catastrophic head injuries in football led to the formation of NOCSAE, has the sport come under such scrutiny. The extraordinary interest in concussions is moving into other sports, including volleyball, soccer and basketball.

SGMA’s State of the Industry Report (2011 edition), which discusses business and participation trends within the sporting goods industry, may be obtained at www.sgma.com.  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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