The expansion by major outdoor lifestyle retailers doesn’t mesh with continued declines in fishing and hunting participation, according to a report from investment bank The Mercanti Group.


“The ongoing decline in participation in the sports of fishing and hunting suggests that the recent rapid store rollout within the outdoor lifestyle retail sector may not be warranted,” observes Dave Remick, a Mercanti director, who authored the latest report.  “It is more likely that an over capacity of retail space has now developed, especially in certain markets.”


The market remains large, with 87.5 million wildlife enthusiasts spending $122 billion annually for hunting, fishing and wildlife watching, including $76.6 billion for equipment of all sorts.  But citing the latest 2006 annual statistics published by the U.S. Fish & Wildlife Service, Mercanti notes that the number of anglers since 1996 has declined 15%, to 30 million, and that the number of hunters has dropped 10.5%, to 12.5 million (both categories only count participants 16 years or older).


The one sector showing growth during this 10-year time span consisted of wildlife watchers, which was estimated at 71.1 million individuals.  While hunting and fishing tend to be male dominated, over half of the wildlife watchers are women. “The positive developments in wildlife watching are in stark contrast with the recent trends occurring in the hunting and fishing markets tracked by the Survey,” Mercanti said.


Mercanti notes that the participation weakness comes as many outdoor lifestyle chains – specifically citing Bass Pro Shops, Cabela’s, Gander Mountain and Sportsman’s Warehouse – have been growing rapidly.


Mercanti further noted that a significant portion of a sector’s core customers are economically sensitive, having discretionary income that is limited and that fluctuates with the current state of the macroeconomic environment.  “In other words,” the report says, “the Outdoor Lifestyle retail sector is facing considerable challenges as the larger players continue to open new stores on an accelerated basis.”