Promoting Sports & Fitness
Participation and Industry Vitality

SFIA Products and Services

SGMA Optimistic About the Industry Sales & Participation

Date: 7/31/12

SILVER SPRING, MD – July 27, 2012 – The U.S. sporting goods and fitness industry had a strong Q1 and Q2, but with increased doubts about future economic growth, there are concerns on the horizon.  That was the underlying sentiment delivered by the SGMA during a webinar yesterday afternoon on the current ‘State of the Industry’ for the sporting goods and fitness business in the United States.  In a series of prepared remarks by SGMA President Tom Cove, Director of SGMA Research Neil Schwartz, and SGMA Vice President of Government Relations Bill Sells, all three men focused on different elements of the industry.

The Big Picture

In his opening remarks, Cove noted that a number of issues have had a positive impact on sales and participation in sports in recent months:

  1. The warm weather in the first quarter helped with participation and sales, with the exception of outdoor winter sports;
  2. Special events such as the Euro 2012 (soccer championship) and the Olympic Games in London are giving sports more exposure and increasing excitement/interest in sports, from a spectator and participant perspective;
  3. New product technology and innovation continue to drive interest in the industry and  sales;
  4. The lack of any lockouts or work stoppages by the NFL and NBA will enhance sports licensed product sales for teams in those two respective leagues.

During his remarks, Cove also noted that the golf and athletic footwear segments of the industry are quite healthy right now, ‘back-to-school’ sales in August and September are expected to be positive, and industry consolidation will remain though the mergers and acquisitions are not as big as they were in the 1990s.  On the sales front, he noted the existence of ‘tablets’ and smart phones is allowing consumers to do more comparison shopping before they ‘pull the trigger’ and make a purchase.  And, e-commerce spending will continue to increase on an annual basis, especially in the sporting goods and fitness industry.  Cove noted that the issue of concussions has become a major point of concern for parents, coaches, and athletes in football, lacrosse, soccer, gymnastics, ice hockey, and cheerleading.  

The Field of Play

Schwartz focused on the topic of sports participation.  He noted that class-based and group exercise activities are the biggest draws in health clubs right now.  These activities include yoga, Zumba, aquatic exercise, boot-camp style conditioning, and stationary (group) cycling.  At the middle and high school level, Schwartz noted that one of the long-term side effects of sports participation is that it helps create lifelong sports, fitness, and activity habits for participants.  In the area of inactivity, he stated that while there are 68.2 million inactive Americans, “people do want to get out and play.”  He also revealed that rates of inactivity for children 6-17 are headed in the right direction.  One of the newer sections of the SGMA sports participation study is the area of aspirational participants, which refers to people who would like to be active, but don’t know how to get started.  Schwartz said that while lack of free time for many people is a major hurdle to overcome to participate in sports, a lack of money is not an issue.  He also lauded the work of USA Swimming which has created a specific program – accessible at www.swimtoday.org – to attract aspirational swimmers to the sport. 

The Role of Capitol Hill

Sells noted that the focal point of SGMA’s presence on Capitol Hill is to support legislation that encourages physical activity though he stated that he doesn’t expect any major legislation passed by Congress until after the national elections in November.  

Sells expects Congress to approve level funding -- $78 million – for the Carol M. White Physical Education Program (PEP), which funds a competitive grant program to give school districts and community based organizations resources to provide students with quality, innovative physical education.  With access to PEP grants, school districts are able to cultivate future generations of active Americans through innovative physical education programs.

SGMA also supports the Personal Health Investment Today (PHIT) Act, which would promote improved health through increased physical activity by making it more affordable to engage in sports, fitness and recreation activities -- through the use of tax incentives.  The PHIT legislation, if passed, would make physical health a cultural value by providing financial incentives that encourage greater participation in sports and fitness activities.  Sells said that PHIT has picked up six congressional sponsors in the last month.

“Prevention is becoming a bigger focus of reducing health care costs which makes PHIT the right solution,” observed Sells.

Sells said that 22 bills have been introduced by Congress (11 by the House of Representatives  and 11 by the U.S. Senate – the same bills) to reduce tariffs on volleyballs, basketballs, golf bags & golf club heads.  The total tariff relief for the industry would be in the area of $5.5 million.  These bills are expected to be passed after elections.

Intellectual property rights are a big concern for U.S. in trade agreements.  Trams-Pacific Partnership (TPP) is being negotiated among 11 countries including the U.S. The TPP will eliminate tariffs and improve market access. 

Sells concluded his remarks by saying that SGMA is spearheading PHIT America, a national social media campaign that will rally support for the PEP and PHIT legislation.

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.  It is available for free for SGMA members.  The cost of this report for non-members is $495.  Click here to order.

SGMA Members can capture a FREE recording and a copy of the presentation by clicking here.

The 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 promoting favorable public policies, fostering participation through research, thought leadership and product promotion.  More information about SGMA membership, SGMA public policy platform, and SGMA's National Health Through Fitness Day can be found at www.SGMA.com.

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