UK Golf Retail Market Update: March 2018

Despite recent, improved temperatures, it’s been a ‘damp squib’ this year,  (for want of a better expression) … and the numbers have been equally disappointing. I’m not referring to my own game here, which is always a bit up and down: I’m referring to the retail sell-through we have seen so far in 2018.

snowy-trees-on-the-golf

After the gloomy start to the year, it was with some trepidation that I spent most of April charging around the UK, visiting hardware manufacturers to talk numbers. Surprisingly, though, there was a definite air of optimism that I found very encouraging.

So, with a sense of positivity, let’s dig through the market numbers to see if there are any green shoots to discuss.

“It‘s been a bit rubbish, weather-wise, so I’m assuming the market was down?”

Well, yes – that would be correct. The market was down in March, 5.8% in value: Making the YTD drop now -10.4%.

“Boo hoo!”, I hear you cry.  And, to some extent, I’d agree with you. But, remind yourselves that 2017 was a great year, so perhaps not the best one to compare to.

Taking a step back, we are still up 5.9% v 2016 and 12.9 up v 2015. So things really aren’t as bad as we might have originally thought.

It’s not just golf that’s suffered so far this year. In general, less people were out shopping.

It’s also easy to get caught up in our little world of golf, and not look outside the box. Another indicator that’s worth considering is the BRC footfall monitor. In March, this saw a drop of 8.6% in the high-street and 6% overall, versus 2017. So, it’s not just golf that has suffered – in general, less people were out shopping.

For many, the weather seems to be taking the majority of the blame for the fall in golf sales. Mean temperature was well-down; sunshine hours were down 17%; and rainfall, and days of rain, were up 10%. There was also nearly a 40% increase in the number of days with air frost. It was cold and wet. And not great for golf.

However, as previously stated, sales were up on 2016, so let’s crack-on and see what is moving.

Value Mix March 2018

As is often the case, woods and irons dominated the sales chart during March. Clubs accounted for 51.6% of spend – one of the highest for a long time. Other categories indexed at similar proportions for this time of year.

Is it the year of the fitting studio?

Looking at the split between on- and off-course, it really seems to have been the winter of the indoor hitting area…With the on-course seeming to fair much better than expected, (up 19% YoY for clubs). The recent investment by many Pros, of fitting studios and indoor areas, has certainly paid-off this winter.

Value change March 2018

While the increase is small, there is relative growth of clubs v 2017, which, as previously stated, was a strong year. Woods are up 4% and wedges by an amazing 27% in value. Cold and wet weather also helped boost outerwear sales by 18%

The recent investment by many Pros, of fitting studios and indoor areas, has certainly paid-off this winter.

However, everything else is looking pretty sad: pointing to lower participation and generally lower sales, especially of consumables and general apparel.

Unit change March 2018

This is clearly shown in the units graph where everything is down, except wedges and outerwear.

So, the Average Selling Price (ASP) must be up for some categories?

Yes, it was for the key club products. ASP has driven the growth in  woods, irons and wedges. Other categories were up in general, but the worrying trend is the continued decline of apparel pricing – especially for ladies clothing.

ASP change March 2018

The interesting shift in this graph, however, is the outerwear number, which has seen a drop of 25% year on year in ASP. With the large volume increases, this points to a shift in the market towards lower-priced products.

So, while it’s been a negative month for most, there were some small upsides. Looking forward, let’s hope April’s numbers bring a bit more positivity to what has been a tough start to the year.

Market Update – February 2018

With the March data due to be released very shortly I thought I should put out some quick commentary on the season so far. February is usually the smallest month – typically 4.8% but it can give us some direction on how the season is going to go. So lets get stuck in.

Its been wet but has it been as bad as it feels?

Yes, the market to the end of February was pretty bad.

Value trend Feb 2018 YTD

The market was down 7% in February, bringing the overall YTD down to 13%. That’s not a good start, and, a stark contrast to last year. However, when we look at these stats, we realise that last year is part of the problem. And, while we’re down year on year, we are up nearly 4% on 2016 – so things aren’t quite as bad as it may appear (or feel).

Last year saw one of the biggest growths we recorded at Golf Datatech – so it was always going to be a tough act to follow.

OK, so it was DOWN – But Does that Apply to all Categories?

Value change Feb 2018

Luckily, no. As you can see irons, men’s tops and bags were all UP in value. However – everything else was DOWN, with some big drops being seen in ladies clothing, trolleys and wedges.

Where has the Drop Come From?

There has been a trend towards reduced units in the 2 largest categories – however others have seen some growth. 2017 saw growth in 11 categories, and drops in 6. Bucking the trend in February – all categories are down, or flat, except for men’s tops: which was the only category to see any growth. Units change Feb 2018

Units saw a drop in all, but 2, categories. Bags were flat and men’s tops were up. 

What About ASP’s

ASP change Feb 2018

Well, at least it was business as usual here, with growth in most categories. The biggest growth came in hardware, with irons seeing a huge ASP increase of 18%. The fact that irons are actually up in value, and driven by large ASP increases, might be the result of all those custom fit studios that have been installed in recent years.

It has also given the on-course the ability to sell during the bad weather, and sell higher value custom-fit sets. Product launches from the big brands have helped this process. 

So was this all Down to Weather?

Well, most people think  February was terrible, which, compared to last year, it was. However, if you look at the long term trends, February 2018 was actually reasonably good. 

We saw 137% of Sunshine for the month and only 73% of average rainfall. However, the key stat during the winter is often temperature: and it was -1.3 degrees down on average, at just 2.3 degrees. That’s just too cold for most to get out and play, and would support the increase in sales of tops – those hardy enough to play needed more layers!

So, What Happens Next? 

Well, February is a small month but, YTD, both January and February have been down. March really did have bad weather – that’s when all the snow fell. My guess would be further drops for most categories and a continued YTD drop.

Give it a few days, and I will be able to tell you for sure, when I have the March data. Watch this space. 

 

 

 

Market Update: October 2017

As we find ourselves in the depths of winter, it’s time to reflect on how the market performed in October, before sales start to drop off significantly.

October is often an unpredictable month. Usually the 7th largest of the year with around 8.3% of annual sales, and it can throw up some funny results. Some years, we see an “Indian Summer”, with extended periods of play. And on the other hand we could see an early start to the winter. It’s also a time when some brands launch new products but other retailers start major clearance. Needless to say it can throw out some spiky numbers.

So how did it go this year?

In the main, pretty bad compared to 2016. Overall sales value is 10.1% down on 2016 with some categories taking a significant drop. Looking at the overall breakdowns, the off-course clubs group was hit the hardest – seeing a 28.9% drop. In contrast, the on-course group saw a 13.7% increase. Other categories have not fared quite as well. Apparel, consumables and other categories are all down between 5.8% and 21.2%, both on- and off-course. The only category (outside of clubs) that is doing ok is light durables – held up by a strong showing from on course shoes.

October 2017 value change table

Looking at the total market for October, shoes and mens’ tops are the only categories to show any growth. Worst hit is shirts – both mens and ladies are down 40%

October 2017 value change

Was October a total disaster?

It would initially appear that way, but if you dive a little deeper into the numbers, it isn’t quite as clear as that. Even though this month’s values have seen a drop over last year, the year to date picture is still strong, with total sales value up 9.4%.

Compared to 2016, October was bad and there are a number of reasons for that. If we take a longer term perspective, October is only 1.6% down on 2015 … and actually 6.8% up in 2014. So when we look at this year’s performance, we need to consider that this October was “on-trend”, and that the real issue lies with a spike in the 2016 numbers.

Let’s compare stats for 2016 and 2017 for participation and weather 

We don’t yet have any participation figures but we do know that this year, on-course ball sales were down 22.1% in units. This would indicate a significant drop in play. Looking at the weather stats, October started badly – hit by a couple of named storms that swept across from the US. However, looking at the rainfall and temperature, the UK actually had less rain than average – 90% – and the temperature was actually up 1.5% on average.

However, sunshine hours were only 80% of the long-term average. What is clear is that these figures are very different to 2016, which was a very good year, with only 42% of average rainfall and 119% of average sunshine hours. The other significant difference was in days of rainfall (a new stat that I have discovered – yeah!). October 2017 had 14 days of rain – one day under the average. 2016 only had 8! This lead to October 2016 seeing an increase in ball volume of 6.9% compared to 2017’s fall. Once the ’round-played’ stats come through, I am sure we will see a significant year-on-year drop-off in play.

So, is the weather to blame?

While undoubtedly the weather played its part, (it always does), this is only one part of the picture. The other major issue in the difference between 2016 and 2017 is the promotional activity run on the off-course last year. Last year saw a major push from the off-course channel for club business with some very aggressive promotions that lead to a 33.7% increase in off-course club sales. This is an unprecedented jump that probably had some longer term effects.

The promotion was so successful that it will have changed some consumers’ buying habits: bringing forward their normal purchase cycle.

So consumers who might have changed their irons every 6 years, had an incentive to trade-in their old clubs and get a new set a year, or two, early. This effectively brought forward some of this year’s sales.

The success of this promotion hasn’t been totally realised due to 2017’s successful product launches. Good showings from Ping and Titleist have hidden some of the disparity. On-course iron sales this month have shown a 37.4% increase on last year – a stellar performance and, in the main, reversing some of the channel shift that happened last year. On-course also saw some growth in woods. Overall these figures help support the clubs sales which overall saw drops between – 4% in irons to -24% in wedges.

Looking at the longer-term club trend, 2017 showed a 2.7% increase on 2015 and a 13% increase on 2014.

So, where did golfers spend their money?

For the first time in a while, we saw a change in the ranking of categories. Irons took top spot with 18%. The change in season brought some repositioning of the other categories, with mens’ tops and shoes jumping up the order, passed balls.

October 2017 sales mix

Looking at the year to date trends, you can see this a bit more clearly.

October YTD 2017 sames mix

The main drop seen in shirts slipping down the order.

Drops in value were also mirrored with significant drops in volume this month.

October 2017 units change

Unless you were a shoe brand, this is probably one of the most depressing graphs I have seen in a long time. Shirts being the biggest loser, but generally everything getting a pounding. Let’s move on.

As we have seen all year ASP’s continue to rise and October is no different. Seeing considerable growth in 13 categories, with only 3 apparel categories seeing some single digit drops. October 2017 ASP change

OK so with the exception of a relatively poor October most of the trends are the same as we have seen for most of this year. What next?

The big issue is whether the relative slump will continue. The worrying thing for me is that last year, October was 9.2% up on the previous year. November however was 17.2% up!! Based on this month’s trend, we might be in for a rocky month next month. Weather hasn’t been great to extend the season – unlike last year. We should also see further effects of last year’s off-course promotions, as they ran on for a couple of months. This is very likely to have an negative effect. Lets just hope the positive product launches can carry us on a bit further.

So where might we end up.

Earlier in the year, when sales were good, I tempered my enthusiasm for massive year on year growth – based on how strong the end of last season was. This seems to be coming true, with the steady year on year drop off continuing.

2017 Value trend - October

Having come from nearly 20% growth in March, its hard to think that this year’s gains might be relatively small. However the trend has declined in most months. As previously offered I was expecting something around 8% to 10% and I think that is still a possibility. While the boom of the last quarter in 2016 has had an effect on this year’s numbers, there have been some really strong product launches that continue to excite the consumer. Let’s hope they continue to buy with enthusiasm.

 

Market Update – End of Summer 2017

I am a little behind this month but thought it important to get another market update out to comment on what happened at the end of summer (August data). I will be doing another one at the end of the month so will keep this short and sweet, here goes. 

August was a big month, and looks like it will be the second biggest of the year, with more than 10% of annual sales falling in the last month of the Summer holidays.

Initially, the stats look a little confusing. Overall market value is up 12.1% versus 2016. However there is a big difference On-, and Off-course this month, and not all categories are up. Also, On-course ball volumes – a good indicator of participation – were down this month -1.1% , which usually indicates that there might be some fall in sales.

So what happened in the key categories?

August 2017 Category Value change

Well, On-course was up across the board. Clubs were up a staggering 29.8% while consumables were up a mere 4.4%. Off-course saw some gains – up 3.7% overall and 5.9% in Clubs. However Apparel was down -12.5% and consumables -2.8%.

The other interesting point is that On-course Outerwear was up 27.6% in units. So I think we can assume that those golfers that did play, needed some weather protection. 

Why are clubs up so much On-course?

Long and short of it, the On-course has really benefited from the recent Ping Launch of the G400. Perhaps we should call this the “Ping effect” or, with the current model, nomenclature the “G Effect”. I talked about this a couple of years ago with the G series and history has repeated itself. It looks like some pent-up spending has been unleashed and while the customers were in the shop they have bought clothing and other items as well. This has to be the main reason for the huge spike in sales, as weather and participation would appear to have been poor – so customers needed a reason to get to the shops.

Crazy stat!

I don’t usually pick out any specific products but the G400 is an interesting story this month. Looking at the raw data for every £100 spent in the On- and Off-course speciality golf shops, £8 was spent on either a G400 iron or a G400 wood – WOW that’s some launch!

So how did this effect the general mix of sales?

General mix is similar to other months. However, woods and irons have both taken a bigger share of the spend this month, with hardware accounting for 42% of sales versus 38% in June, and 39.5% in August last year.

2017 Value mix - August

Overall sales were up in 13 or 17 categories. Shirts collectively were the biggest looser along with men’s bottoms and distance devices. It appears that the spend on big ticket woods and irons pulled attention away from the higher value tech products.

August 2017 Value change

So was all this growth just from ASP (like most of this year)?

ASP is well up across the board with huge gains in woods trolleys and irons. However most of the clothing categories are pretty static with a year ago.

August 2017 ASP change

High ASP’s might be hurting distance devices. They are well down in units, but otherwise most unit sales are middling to flat, (except the obvious apparel that’s been hit by the weather). Woods were down slightly this month which is better than previous months. Irons were actually up even with the 18% increase in price.

August 2017 Unit change

How does this look for the rest of the year?

Well, the trend is pretty well set this year for solid growth. Previously I was calling between 8 and 10% and this is looking pretty safe. One of the key determinants was how well the product launches from the key brands went in H2. Ping has obviously done very well and Titleist have also made up some ground. Looking at this momentum double digit growth year on year is well on the cards.

Sales growth v last year.

Value trend Agust YTD 2017

Next month the picture will be a bit clearer and we can see if the trends continue with strong On course sales.