Sports Goods Retailing - UK - June 2008

Sports Goods Retailing - UK - June 2008

About this report

The UK sports goods market was worth £5.6 billion in 2007. It has undergone massive consolidation with the rise of Sports Direct International to market leadership, with a UK retail turnover of over £1 billion a year, more than doubling in size since 2003. Other retailers have struggled to cope with the effects of discount-based competition by trying to differentiate themselves. Some, like JD Sports, have been successful, while others have seen profitability decline to very low levels.

Some parts of the market are booming, while others are contracting. Running and personal fitness, for instance, are both seeing rising popularity. Although the failure of the England team to qualify for the Euro 2008 football tournament is denting replica kit sales at a national level, club sales are booming and other sports are also providing profitable turnover. The market is set to get tougher as consumer spending slows down in the next couple of years, but in the long run trends towards greater concern with healthy living could help it rebound.

Key report themes:

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Some of the issues this report sets out to look at include the following:
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What is happening to price deflation and the size of the market?
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What strategies are the major retailers adopting and how successful are they?
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How is the consumer background to the market changing?
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What is happening to consumer shopping patterns?
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How much do they spend?
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What do they think of sports goods shopping?

Contents

Issues in the Market
Main issues
Definition
Abbreviations
Market in Brief
Market worth £5.6 billion
Where consumers shop
What consumers think and do
Sports Direct hits a rough patch
JJB Sports and Blacks Leisure see profits collapse
John David Group hits the right fashion note
Market prospects good after consumer slowdown
Internal Market Environment
Key points
An active population?
Figure 1: Agreement with selected lifestyle statements, 2003-07
Solo sports on the rise
Figure 2: Sports/activities played or taken part in regularly, 2003-07
Sporting events
Cost inflation looms for sports goods
Figure 3: Sports clothing and footwear and sports equipment, price deflation, 2002-07
General interest in sport
Figure 4: Interest in named sports/pastimes, 2003-07
General concerns about health and obesity
Figure 5: Incidence of feeling overweight, 2005-07
Fashion trends
Broader Market Environment
Key points
Personal disposable income
Figure 6: PDI, at current and constant 2003 prices, 2003-13
Consumer expenditure
Figure 7: Consumer expenditure, at current and constant 2003 prices, 2003-13
Demographic trends
Figure 8: UK population, by age, 2003-13
Clothing and footwear price deflation
Figure 9: Clothing and footwear spending, current and constant 2003 prices, and price deflation, 2003-08
Socio-economic changes
Figure 10: UK adult population 15+, by socio-economic group, 2003-13
Market in Context
Key points
Sports goods underperform
Figure 11: UK sports goods consumer expenditure, including VAT, seasonally adjusted, at current prices, compared with all retail sales and selected spending categories, 2002-07
Recreation and culture races ahead
Prospects for 2008 and beyond
Figure 12: UK sports goods consumer expenditure compared with total expenditure and individual spending categories, 2002-07
Strengths and Weaknesses in the Market
Strengths
Increase in 25-34s and 45-54s
Rising concerns about health
More ABC1 consumers
Brands invest in fashion product
Interest in fitness and running
Weaknesses
More over-65s
Slowdown in consumer spending
Continued selling price deflation
Sourcing prices set to rise
Downmarket image of sports casualwear
Market Size and Forecast
Key points
The sports goods market
Sports clothing
Figure 13: UK consumer expenditure on sports clothing, at current and constant 2003 prices, 2003-08
Sports footwear
Figure 14: UK consumer expenditure on sports footwear, at current and constant 2003 prices, 2003-08
Sports equipment
Figure 15: UK consumer expenditure on sports equipment, at current and constant 2003 prices, 2003-08
Total market
Figure 16: UK consumer expenditure on sports goods, at current and 2008 prices, 2003-13
Future prospects
Squeeze on spending
Ageing population
Technological innovation
Participation in sport and healthy living
Sports and fashion
Forecast
Factors used in the forecast
Industry Issues
Key points
The state of the market and current trading
What do you expect for the rest of 2008 and 2009?
Top performing product areas and trends
Top performing brands
Retail success stories
Sportswear: actually worn for sport?
What is happening to the relationship between brands and retailers?
How important is own-label to a retailer’s success?
What do you think are the prospects for the replica kit market?
Customer service: what do customers want?
The Internet: increasingly powerful in sports goods
The online leaders
How does the high street square up versus OOT and online?
Sports goods in the over-45 society
Where Do Consumers Shop For Sports Goods?
Key points
Sports goods shopping – Trend data
Internet gains ground
Figure 17: Outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, April 2005 vs March 2008
JJB Sports maintains a huge lead
Figure 18: Outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, March 2008
JJB has a wide age spread
JJB commands loyalty
JD shoppers also buy from JJB
Clothing stores need differentiation
How Much Consumers Spend
Key points
Men under 45 are the big spenders
Figure 19: Spending on sports clothing, footwear or equipment in the past 12 months, March 2008
Internet capitalising on high spenders
Figure 20: Outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, by spending on sports clothing, footwear or equipment in the past 12 months, March 2008
Retail Competitor Analysis
Key points
Channels of distribution
Figure 46: Estimated shares of channels of distribution, 2007
Leading sports goods retailers
Figure 47: Leading sports goods retailers, competitive analysis
Evaluation of leading players
Leading Sports Specialists
JJB Sports
Strategic evaluation
Shopper research profile
Background
Financial performance
Figure 48: JJB Sports, financial performance, 2003-08
Store portfolio
Figure 49: JJB Sports, store numbers and retail space, 2003-08
Retail offering
Operational issues
Advertising and marketing
E-commerce and home shopping
John David Group
Strategic evaluation
Background
Shopper research profile
Financial performance
Figure 50: John David Group, financial performance, 2003-08
Store portfolio
Figure 51: John David Group, store numbers and retail space, 2003-08
Retail offering
Operational issues
Advertising and marketing
E-commerce and home shopping
Sports Direct International
Strategic evaluation
Background
Shopper research profile
Financial performance
Figure 52: Sports Direct International, financial performance, 2003-08
Store portfolio
Figure 53: Sports World International, store numbers and retail space, 2003-08
Retail offering
Operational issues
Advertising and marketing
E-commerce and home shopping
Blacks Leisure
Strategic evaluation
Background
Shopper research profile
Financial performance
Figure 54: Blacks Leisure Group, financial performance, 2003-08
Store portfolio
Figure 55: Blacks Leisure Group, store numbers and retail space, 2003-08
Retail offering
Operational issues
Advertising and marketing
E-commerce and home shopping
Intersport UK
Strategic evaluation
Background
Shopper research profile
Financial performance
Store portfolio
Retail offering
Advertising and marketing
E-commerce and home shopping
Mini profiles
Cotswold Outdoor (31 stores, mail order, Internet)
Ellis Brigham (20 stores, three catalogues, Internet)
Footlocker (54 stores)
Nevisport (eight stores, Internet)
Snow + Rock (17 stores, Internet)
SweatyBetty (24 stores, Internet, catalogue)
Sweatband.com
Sweatshop (27 stores, catalogue, Internet)
American Golf (66 stores, Internet)
Nevada Bob (23 stores, Internet)
Décathlon (six stores)
MandMDirect.com (Internet, catalogue)
Non-specialists
Argos (700 stores, Internet, Catalogue)
Amazon.co.uk
Littlewoods (Internet, catalogue)
Retail Advertising and Promotion
Key points
JJB dominates advertising
Figure 56: Sports goods market, main media advertising expenditure by retailer, 2003-07
Appendix – Where Do Consumers Shop For Sports Goods?
Purchasers vs non-purchasers – detailed demographics
Figure 57: Whether clothing, footwear or equipment for sports or outdoor activities has been bought in the last 12 months, by demographic sub-group, March 2008
Outlets used– detailed demographics
Figure 58: Most popular outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, by demographic sub-group, March 2008
Figure 59: Next most popular outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, by demographic sub-group, March 2008
Combinations of outlets used
Figure 60: Outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, by most popular other outlets used, March 2008
Figure 61: Outlets used for buying clothing, footwear or equipment for sports or outdoor activities in the last 12 months, by next most popular other outlets used, March 2008
Appendix – How Much Consumers Spend
Spending– detailed demographics
Figure 62: Spending on sports clothing, footwear or equipment in the past 12 months, by demographic sub-group, March 2008