Sporting Goods Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 20,000 sporting goods stores in the US sell a wide range of sporting and athletic products to recreational enthusiasts and the general public. Products typically fall into three broad categories: apparel, footwear, or hardline merchandise (equipment and accessories). Specialty stores may focus on only one category of product, such as golf or skiing.
Intense Competition Creates Challenges
Sporting goods stores face intense competition from large chains, mass merchandisers, catalogs, and Internet retailers.
Reliance On Imports
A significant portion of the products that sporting goods stores purchase for resale, including those purchased from domestic suppliers, are manufactured abroad in countries such as China, Taiwan, and Vietnam.
Industry size & Structure
The average sporting goods store employs about 12 workers and generates about $3 million in annual revenue.
- The sporting goods stores industry is comprised of 20,000 retail establishments, generating sales of about $67 billion, and employing 240,000 workers
- Large sporting goods retailers include Dick's Sporting Goods, Cabela's, and Big 5 Sports.
- In general, competition tends to fall into the following five basic categories, depending on a stores size and/or product offerings: superstores, traditional stores, specialty stores, mass merchandisers, or catalog/internet retailers.
- Superstores - Stores in this category are usually 35,000 square feet or larger and tend to be in freestanding locations. These stores typically offer a very wide number of products, across all athletic and sporting venues, and emphasize high volume sales. They often offer their own private label branded products, in addition to nationally branded products. Examples of sporting goods superstores include Dick's Sporting Goods and Academy Sports & Outdoors.
- Traditional Stores - These stores usually range in size from 5,000 to 20,000 square feet and are frequently located in regional malls and multi-store shopping centers. Traditional stores can be independent or chain stores, usually carry a varied assortment of athletic and sporting merchandise, and often position themselves as convenient neighborhood stores. Stores in this category include Big 5 Sporting Goods and Hibbett Sports.
- Specialty Stores - Specialty sporting goods stores range in size from about 2,000 to 20,000 square feet and typically offer an extensive assortment of one specific product category, such as athletic shoes, golf, or outdoor equipment, or may focus on one or a limited number of sports. They often have a lower operating-cost advantage because of their smaller store footprint. Specialty stores typically carry higher quality lines of products, selling at higher prices but lower volume, and may offer more extensive services, like repair and maintenance, or pro-shops. Examples of these stores include Bass Pro Shops, Cabela's, Foot Locker, and REI.
- Mass Merchandisers - This category includes discount retailers such as Walmart or Target, and department stores such as Macy's and Kohl's. They may be located in regional malls, shopping centers, or freestanding sites. These stores range in size from 50,000 to 200,000 square feet, but the space devoted to sporting goods merchandise represents a very small portion of their overall square footage. Their merchandise selection is usually much more limited than other sporting goods retailers, and is typically focused on popular sports and fast-moving merchandise. Mass merchandisers place less emphasis on customer service and equipment services, but usually have a price advantage over other retailers due to their greater purchasing power.
- Catalog and Online Retailers - This category consists of numerous retailers that sell a broad array of new and used sporting goods or accessories via catalogs or the Internet. These retailers typically compete by offering some combination of low prices and shopping convenience. They can offer low prices, due to their lower overhead expenses and often sales tax avoidance, as well as the convenience of shipping direct to the consumer. The Internet has been a rapidly growing sales channel, particularly among younger consumers, and an increasing source of competition within the sporting goods retail industry.
Industry Forecast
Sporting Goods Stores Industry Growth
Recent Developments
Sep 18, 2024 - Sales, Employment Down
- Sales for sporting goods stores declined 5% in June 2024 compared to a year ago, marking the fourth consecutive month of declines year over year, according to the US Census Bureau. Month over month, sales for sporting goods stores increased 5.2% in June from May. Consumer spending has improved modestly, rising 2.6% in June 2024 compared to a year ago and up 0.2% from the previous month, according to the Bureau of Economic Analysis. Producer inflation fell 0.28% in July 2024 compared to a year ago, according to the Bureau of Labor Statistics. Employment by sporting goods retailers declined 1.3% in July year over year as wages grew 3.3%, reaching an average of $22.26 per hour, per the BLS.
- High school sports participation has reached a record high of 8 million in the 2023-24 school year, increasing for the second consecutive year, according to a National Sporting Goods Association survey. Sports participation, a driver of industry sales, has been improving after hitting lows during the pandemic. The new record toppled the previous record of 7.9 million set in 2017-18. Eleven-player football remained the most popular boys' sport in 2023-24, and the emerging sport of flag football has seen the number of girls participating double from 2022-23 to 2023-24. Wrestling posted increases in participation for both boys and girls, with girls' participation growing 102% from 2021-22. The top participatory sports for girls were outdoor track and field, volleyball, and soccer, while football, outdoor track and field, and basketball were the top participatory sports for boys. The top 10 states for sports participation were Texas (859,301), California (834,103), New York (341,454), Pennsylvania (336,946), Ohio (323,117), Illinois (320,603), Florida (299,398), Michigan (289,740), New Jersey (280,798) and Minnesota (224,179).
- Consumer confidence levels increased in August 2024, according to data from The Conference Board. The Conference Board’s consumer confidence index was 103.3 in August 2024 from 101.9 in July 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those over age 35 and those in the income category of over $100,000. Plans for large appliances and smart phone purchases rose on a six-month average basis. Plans to buy a home dropped to a 12-year low while plans for car purchases improved on a six-month average basis.
- Consumers plan to lean more on Buy Now, Pay Later (BNPL) services during the upcoming holiday season, with nearly a third of respondents considering using the option for their shopping, according to a new holiday survey by Morning Consult and Afterpay. About 23% of respondents said BNPL helps them stretch their holiday budget, and nearly 60% said they plan to use the BNPL even more in the upcoming holiday season. Demographically, millennial parents (42%) and Gen Z (41%) shoppers are more likely to consider BNPL for their holiday shopping. According to Afterpay, "As holiday shopping trends continue to evolve, these findings offer valuable insights into consumer behavior, spending patterns, and the growing reliance on flexible payment options like BNPL. Retailers and brands that adapt to these trends are likely to resonate with today's early-shopping consumers." The survey also revealed that nearly half of shoppers plan to buy from brands with free shipping to reduce the burden of shipping costs. Consumers planning to shop online say they are most likely to make purchases on a store/brand website (69%), apps (60%), ecommerce platforms (47%), and social media (18%) during this holiday season.
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