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A decline in disposable income during the recession and increasing competition from department stores and mass merchandisers have restrained growth, but the industry will rebound as consumer spending picks up in the next five years. For these reasons, industry research firm IBISWorld has added a report on the Sporting Goods Stores industry to its growing industry report collection.
Los Angeles, CA (PRWEB) March 15, 2013
The Sporting Goods Stores industry in Canada has been flexing its muscles over the five years to 2013. Driven by rising consumer awareness of the benefits of good health and participation in sports, revenue is expected to increase at an annualized rate of 0.3% over the five years since 2008, says IBISWorld industry analyst Dale Schmidt. Not all news has been good for the industry, though; increasing levels of competition from department stores and mass merchandisers have restrained growth. In addition, a decline in disposable income during the recession has adversely affected industry sales. However, as consumer spending conditions rebound in 2013 with the general economic recovery, IBISWorld expects industry sales to increase as well over the year, albeit slowly. In 2013, revenue is expected to rise 0.2% to total $5.3 billion.
Historically, sporting goods stores were small, family owned businesses that serviced the needs of local communities. Wholesalers were the primary suppliers of merchandise, and operators had little or no competition from other retailers because of their high level of specialization. In the past two decades, the arena for sporting goods retailers has changed, with some industry players evolving into national chains that have considerable buying power. In 2012, Foot Locker was the only major company, providing the Sporting Goods Stores industry with a low level of concentration. Over the past decade, this industry has been subject to increasing concentration, as industry revenue growth has outpaced the growth in the number of firms. The increasing concentration can be attributed to a number of factors, including price competitiveness among players, the entry of Asian-made merchandise into the domestic market (which further prompted price competition) and an expansion in the range of sporting equipment, footwear and apparel stocked by department stores and mass merchandisers, says Schmidt. Intense competition in the industry, particularly from mass merchandisers, will lead to increased consolidation over the five years to 2018.
The industry's transformation has not been without hardship. The rise in national sporting goods chain numbers has created an opportunity for department stores and mass merchandisers, who can gain similar economies of scale, to aim for a share of the sporting-goods pie. The entry of these external players has led to increased competition in an already tightening retail market. As a result, the number of industry operators has barely increased over the past five years, despite the industry's revenue growth. Despite the rise in competition, sporting goods retailers have benefited from their ability to offer consumers specific brands, specialized service and extra services like rock climbing walls and putting greens to test out equipment before it is purchased. In the five years to 2018, growth will return, stimulated by a recovery in consumer sentiment and increased disposable income. However, demand growth will be stifled as the available leisure time for the average Canadian continues to fall. For more information, visit IBISWorld’s Sporting Goods Stores in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry retails new sporting goods, including bicycles, camping equipment, exercise and fitness equipment, apparel, footwear and other sporting goods and accessories. Products are sourced from sporting goods manufacturers and wholesalers and then sold to the general public via retail stores. Department stores, mass merchants and retailers that exclusively sell apparel are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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