WHAT PEOPLE BUY: SPORTING GOODS AND EXERCISE EQUIPMENT

Since 2000, consumer purchase incidence of sporting goods and exercise equipment has been on the rise. In 2003, nearly half of U.S. households (48 percent) reported buying either sporting goods or exercise equipment and supplies, compared to 43 percent in 2001 and 36 percent in 2000.

This finding signals that consumers are getting concerned about health and fitness, as does research from the National Sporting Goods Association about the sports in which consumers choose to participate. For example, exercise walking was the number one most widely enjoyed sport during 2002. More than 82.2 million Americans age 7 or older walked for exercise at least once. Other popular sports in order of participation were camping overnight (55.4 million), swimming (54.7 million), exercising with equipment (50.2 million), and fishing (44.2 million). New concern with health and fitness is evidenced by the fact that exercising with weights is among the five fastest-growing sports in terms of participation, up 14 percent over 2001 levels. Among the other fastest-growing sports based upon participation are paintball games, up 24 percent; water skiing, up 18 percent; and hiking, up 17 percent over 2001.

Industry Snapshot

Total industry sales of sporting goods and equipment were $21.7 billion in 2002, up only 1.8 percent over 2000 levels of $21.4 (see Figure 7.15). Fueled by a concern about rising obesity levels, Americans spent $4.3 billion on exercise equipment to help them get back into shape. While expenditures on exercise rose, they spent nearly 11 percent less on golfing equipment, suggesting that Mark Twain was right in his assessment of golf as "a good walk spoiled." Nearly 80 percent of total industry revenues are from the sale of equipment within these seven categories: exercise, golf, team sports, hunting and firearms, fishing and tackle, camping, and optics.

	2000	2002	% CHG '00–'02
Total Retail Sales in millions	$21,373.8	$21,748.3	1.8
Exercise	3,643.2	4,336.1	19.0
Golf	3,744.2	3,338.8	-10.8
Team goods and sports	2,456.0	2,530.5	3.0
Hunting and firearms	2,256.0	2,469.9	9.5
Fishing tackle	2,030.2	2,023.5	-0.3
Camping	1,344.5	1,415.0	5.2
Optics	729.1	825.7	13.2
Billiards and indoor gaming	359.0	543.1	51.3
Skiing, downhill	547.8	528.3	-3.6
Wheel sports and pogo	1,074.4	493.5	-54.1
Tennis	378.0	396.5	4.9
Skin diving and scuba gear	355.3	330.8	-6.9
Basketball	285.6	322.7	13.0
Baseball and softball	319.0	305.8	-4.1
Archery	254.4	276.4	8.6
Skiing, snowboards	234.3	244.8	4.5
Bowling	162.3	172.5	6.3
Hockey and ice skates	136.0	165.3	21.5
Football	84.9	89.9	5.9
Soccer balls	65.1	62.4	-4.1
Water skis	50.2	58.4	16.3
Skiing, cross country	33.6	37.2	10.7
Volleyball and badminton	29.3	32.2	9.9
Racquetball	42.0	28.5	-32.1
Other	759.4	720.5	-5.1
Source: National Sporting Goods Association

Figure 7.15: Sporting Goods and Exercise Equipment Industry Snapshot

Retail Overview

Consumers favor sporting goods stores as the best place to buy sporting goods and exercise equipment. Valuing the sports stores' much wider selection of goods, nearly 60 percent of consumers of these products made purchases in sporting goods stores. Discount department stores, where only 39 percent of shoppers frequent, have a way to go to draw the sporting enthusiast to their stores for their favorite equipment. Traditional department stores trail with only 16 percent of shoppers using these stores for sporting goods.

With 3,600 stores and sales of $4.4 billion, Foot Locker is the leader in the category with an emphasis on athletic footwear and apparel through their Foot Locker, Champs Sports, and Eastbay brands (see Figure 7.16). Sports Authority, after merging with Gart Sports in 2003, became number two in the category with $1.4 billion in sales and just fewer than 400 stores nationwide. Dick's Sporting Goods follows with about 100 stores and $843 million in revenues.

	2002 SALES
Foot Locker (3,600 stores)	$4.4 billion
Sports Authority (385 stores)	1.4 billion
Dick's Sporting Goods (140 stores)	1.1 billion
Bass Pro Shops (15 stores)	1.1 billion
Academy Sports (60 stores)	775 million
Recreational Equipment/REI (60 stores)	700 million
Big 5 Sporting Goods (275 stores)	668 million
Galyan's (35 stores)	483 million
Modell's Sporting Goods (90 stores)	465 million
Source: 2002 Directory of Apparel Specialty Stores by Chain Store Guide

Figure 7.16: Sporting Goods Market Share Leaders

These specialty retailers, along with others like Galyan's, Bass Pro Shops, Orvis Company, Cabela's, and Eastern Mountain Sports, have kept the "sport" first and foremost in their store design and shopping experience and so have been able to maintain their specialty edge. For example, Galyan's signature two-story climbing wall has made their 20 stores a destination for climbing enthusiasts all over the country. The company's senior vice president of marketing, Ed Whitehead, explains: "It's become an icon for us. We really refer to it as our town center." They also sponsor seminars, athlete appearances, and even basketball shooting contests.

Purchase Drivers

Sports provide the participant a sense of accomplishment and well-being, health benefits, and stress relief. Sports can become compelling hobbies in which one or all members of the family participate. Practitioners of various sports have to purchase the right equipment to be a "player"—the right clubs, shoes, clothes, accessories, and so forth. Men, in particular, like competitive sports including the competitive purchase of sporting accessories. "My husband is really involved in buying sporting goods. It's a luxury and very expensive. Most sports are expensive. But my husband really needs it as an outlet. It's his time with the guys, without the stress of the office. He works hard at the hobby. And it gives him health benefits." But what is stress relief for one can be stress inducing for another: "To me sports and exercise is a stress. It means sweating and working hard."

One consumer explains how she and her family cut back on certain discretionary expenses to allow them to pursue their passion for skiing. "We drive old cars, but we get to ski all winter long. It is all about what you and your family think is important. We don't care if people are impressed by the car we drive, but we have a whole ton of fun on the ski slopes. There are trade-offs. What is one family's idea of fun isn't the same as another's. Some want a pool in the backyard. For us it's the time spent skiing."

Demographic Variables

In this category men are more active purchasers than women, with 53 percent of men buying sporting equipment, compared to 43 percent of women. This is a category for the younger consumer. Although consumers up to age 54 are fairly active buyers in this category, the youngest consumers, aged 18 to 24, have the highest purchase incidence of any age group. In this category, white and Hispanic consumers are much more likely to purchase than are black Americans.

As income rises, so does a consumer's likelihood of purchasing sporting goods and exercise equipment. Those at the highest income levels are more active purchasers than the lower-income households. The more highly educated households, those with some college or more, are also more active buyers of sporting goods. Household size is also an important determinant of purchase. Households of three or more people, as well as those with children, are the most likely to make purchases in this category.

Key Demographics of Sporting Goods and exercise Equipment Buyers.

• Men buy more actively.

• This category skews toward a more youthful consumer, although purchase incidence is strong through age 54.

• White and Hispanic households buy more actively than blacks.

• Rising income and educational levels favor purchase.

• Households with children buy more often.