Outdoor Industry Association released its retail sales top-line report for May 2008 last week, indicating a strengthening market for outdoor products even as the economy weakens amid higher gasoline prices, a tougher job market and the lowest consumer confidence ratings in decades. The results may reflect the long-held belief that the outdoor specialty business is more resilient in tough economic times.
Based on data contained in the OIA report, Outdoor Specialty sales rose in mid-single-digits for the month of May, while Outdoor Chains increased in the mid-teens and the Internet posted strong double-digit gains for the month. The report indicated that just about every equipment category showed increases for the month and apparel also showed growth, but cooler weather during the month was cited as a primary reason for double-digit declines in sandal sales that cut into overall footwear sales for the period.
The OIA report suggests that paddle product sales across the three channels increased in high-single-digits in May versus the prior year, with boat sales accounting for 59% of all paddle sports sales. A differential in growth rates between dollar and unit sales would indicate an increase in average selling prices as well.
“By riding strong sales in the cycling and family camping sectors, specialty retailers have held up fairly well in the current economic climate,” said Frank Hugelmeyer, president and CEO of Outdoor Industry Association. “Specialty brands who cater to an upper end NPR type consumer are still posting strong numbers while brands that cater to lower incomes are experiencing a change in consumer behaviors due to rising inflation. Overall, cautious conservatism seems to be the prevailing mood at specialty retail and I expect that attitude to continue well into the fall.”
Based on the retail point-of-sale data compiled by SportScanINFO, the positive trend has apparently continued into June and July. The camping/backpacking/hiking equipment business was roughly flat for the month of June, but a double-digit improvement in sales of bicycles and bicycle-related equipment helped push sales up in the mid-single-digits in the sporting goods, sport specialty, Internet and discount/mass channels for the month.
“A look at POS trending data reveals a consumer that has really bought into the concept of global climate change, even if some of it is driven by higher gasoline prices,” said James Hartford, president & CEO of The SportsOneSource Group, which owns the SportScanINFO platform and publishes this newsletter. “Yes, they are investing in bicycles at an alarming rate as more take to bike paths or bus n bike commuting, but we have also seen a tremendous jump in water bottle sales – primarily the plastic or Lexan-type – as consumers look for ways to eliminate waste from buying bottled water in small bottles.”
Mountain bike sales were up in double-digits in both the full-line sporting goods and discount/mass channels in June. Comfort/cruiser bikes were also up in double-digits for the month.
Outdoor specialty footwear posted a flat month for June across all channels, hurt by a sharp double-digit decline in trail running sales for the five-week retail fiscal month of June ended July 5, 2008 versus the previous year period. Excluding the decrease in trail running in the mall, the outdoor specialty footwear business posted a mid-single-digit increase for the month.
The outdoor specialty grouping includes approach and fashion casual footwear, as well as technical hikers, light hikers, water/hybrid shoes, trail sandals, water sandals and trail running shoes. If fashion casual sandals, which are dominated by the Crocs business, were considered in the grouping, sales would have been down in the low-single-digits for the month.
“Fashion casual sandals experienced a strong double-digit decline for the month of June,” said Hartford. “The mall specialty channel was the only channel that experienced growth in the fashion casual sandals business for the five-week period.” Crocs had the dominant share in the sport retailer sector for the month, adding over four points to account for nearly 69% of the business.
The outdoor specialty footwear business was flat at full-line sporting goods stores in June, but grew in the high-single-digits in the sport specialty channel and increased in the mid-teens in the Internet channel. The mid-tier department store, family footwear and discount/mass channels were all down for the fiscal month.
Water sandals were up slightly for the month, but trail sandals posted a strong double-digit gain, accelerating ahead of the YTD trend. Light hiking saw a big jump in the sport retailer sector even as the category posted a decline in the mid-tier and discount/mass sectors. Technical hiking was down across the board for the month.
The outdoor apparel business posted a down month in June, due to double-digit declines in the discount/mass and mid-tier channels and a weaker womens market. The specialty business and the Internet was still generating growth even as other sectors continued to struggle.
“The observations made by OIA are supported by the recent How America Shops study compiled by The SportsOneSource Group,” said Hartford. “It is clear that upper economic groups, which tend to favor specialty shops, still continue to spend, but they are more concerned about the price/value relationship. The specialty guys need to keep this in mind when looking to 2009.”
