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April 2017 Golf Equipment and Apparel Demand thru On/Off Course Specialty/Online Channels Remains Soft

Facing poor weather and weak unit demand during the early months of 2017, most major categories of golf equipment and apparel are down vs. prior year.

Key Product Line Results:

*Even though heavy rain and cold dampened enthusiasm for playing the game across a broad swath of the US, golf ball sales remain a bright spot overall, increasing in both units and dollars sold vs. prior year.

*Wood sales were down double digits in units sold however dollars fell only slightly.  The wide discrepancy in units vs. dollars was impacted by:

  1. Higher prices on new woods in the market
  2. A dearth of close out models available for golfers seeking value at lower price points
  3. A mix shift toward drivers and away from fairways/hybrids (drivers having much higher selling prices)

*After multiple years of iron expansion, iron sales slowed significantly early in 2017 as golfers turn their purchasing sights toward woods, particularly drivers, which have long been perceived as the “sexy” category and the leader in technology.  There’s little doubt that rapidly increasing prices in irons have negatively impacted demand, with the April YTD Average Selling Price of a new iron up almost 20% in 2017 compared to 2015.

*Apparel sales vs. YAG stabilized in April, leaving the category slightly in the red vs. 2016.    Men’s shirts (the largest category of golf apparel) continue to be the primary drag on overall apparel sales, perhaps negatively impacted by the poor weather which have kept golfers away from their pro shop.

Channel Shake Up:

*There was a sharp contraction in the number of Off Course Specialty outlets late in 2016 and early 2017, with the bankruptcy of Golfsmith the most high profile example.  While some of the former Golfsmith locations were purchased and reopened as Golf Galaxy stores, the vast majority closed and left a void in the market which has benefitted the remaining Retailers and Golf Pros.

*The Green Grass channel has benefitted significantly from some of the Off Course Specialty “correction”.  With 80-100 less Off Course stores (Golfsmith plus other store closings) open across the US, golfers need outlets to buy clubs, balls, shoes, bags, gloves and apparel, and many turned toward their golf professional.  On Course sales of equipment thru April of 2017 were up almost 9%.

Summary:

Total Demand for Equipment and Apparel remains weak thru the On/Off Course Specialty/Online channels, however the largest and most significant months of sales remain unaccounted for, and May and June sales will be critical to forecasting the remainder of 2017.

by jkgolfdatatech