Golf market review

Phil Barnard, Partner at GolfDatatech, provides GOLF RETAILING with an insight into how the market performed in 2016, which sectors performed well for retailers and what products underperformed.

To say 2016 was a year of a change and surprises is an understatement. Brexit and a new Prime Minister, Trump and a change of direction for the US. A record medal hall for Great Britain at the Rio Olympics topped off with a gold medal for Justin Rose. The football Premiership ending up with the longest odds winners ever, Leicester, taking the title. Finally more golf, with the fancied Europeans losing the Ryder cup to a resurgent US. Who knows what 2017 will bring, but before we get too excited about the future, now is a good time to reflect on what happened in our own industry in 2016.

Weather played a key role in setting the retail trends right from the start. A terrible start to 2016 brought record rainfall and meant that many clubs were closed for long periods of time – some seeing no play for 12 weeks or more! It wasn’t too cold so people were still thinking of golf but appear to have headed to the off course (golf specialty stores) ranges and shops to get their golf fix.

This was really reflected in the numbers with the off course channel being over 10 per cent up in Q1. This trend continued and the off course channel would see an increase of over 10 per cent for the whole of 2016. By contrast the on course (Pro shops) really struggled. A terrible start to the year left them 5 per cent down YTD (year to date) by the end of February and from that point on they were always playing catchup. In fact for the first half of the year weather-wear was one of the best performing categories – 10 per cent up YTD in June.

Fortunately a decent autumn and perhaps some momentum generated by the Olympics and Ryder cup meant that golfers were still out and playing golf. By the end of the year the on course retail had cut their losses and were within 0.5 per cent of 2015’s value. The marked difference in performance between the two channels saw a shift in total spending back to the off course for the first time in a number of years. Total spend in audited categories moving to 45.4 per cent for the off course (up from 42.2 per cent in 2015) and 54.6 per cent for the on course.

Golf Datatech tracks sales of all the main golf retail categories including Balls, Bags, Gloves, Shoes, Trolleys, Putters, Irons, Wedges, Woods, Shirts, Tops, Trousers and Weather wear. Overall this accounts for about 90 per cent of total consumer spend on golf products.

Overall, seven on course and 12 off course categories grew in value in 2016. Everything except Trolleys and weather-wear saw an overall increase, with the latter being the worst performing category with a decline of 2.6 per cent, incredible considering it was the one of the best performing categories up to June. The biggest winner of the year was Trousers – with more than a 14 per cent increase in sales value.

2016 saw the top three categories change in relative priority from the largest being Woods, Irons and Balls to Woods, Irons and Footwear. Footwear became the third most valuable category for the first time since we have been tracking the data.

Generally Apparel was responsible for a lot of the growth and the off course seem to have got behind this category and driven a lot of sales through their stores. Typically the on course is bigger in this category and this still remains the case, however the on course share of business dropped from 68 per cent to 62 per cent in 2016.

Golf clubs saw growth both on and off course and, like apparel, the off course seemed to gain more sales with them accounting for 52 per cent of Clubs sales value. While outwardly all the growth might appear positive, we need to take a look at the unit sales to get the full picture. Unit sales were down in hardware, flat in balls and slightly up in Apparel, Shoes and Gloves. Clubs saw a consistent decline across the board. Worst affected were Putters – losing 8 per cent compared to 2015. As with the value changes, on course was worst affected with a drop in units for 12 out of the 13 categories.

With the decrease in units across many of the categories the increase in value has come from big rises in ASP (average sales price). While Trousers and Shirts saw a small decline all other categories average prices were up at least 1.3% per cent, some significantly. Putters saw the biggest jump with an increase over 19.4 per cent.

Key stats at a glance:

  • By the end of 2016 on course retail were within 0.5 per cent of 2015’s value
  • For the first time shoes made it into the top three value categories, behind woods and irons
  • The average price of a putter increased 19 per cent
  • Trousers saw a 14 per cent increase in sale value