Seventy-two percent of companies now anticipate that sales will not return to pre-COVID-19 numbers until 2021, and 53 percent report not until Q2 of 2021, according to the SFIA’s 3rd Edition of its monthly COVID-19 Industry Impact Report.
The expectation for sales to bounce back has been postponed likely due to recent announcements regarding elementary and secondary schools not meeting in person in the fall of 2020. Notably, from a different perspective, the number of companies projecting their 2020 fiscal year sales to be greater than 2019 has doubled from May to June, from 10 percent to 21 percent.
June provided the industry with some hope as 68 percent of companies saw month-over-month sales increases from May to June with 38 percent of companies increasing 26 percent or more in sales. E-commerce has remained steady, but it is not absorbing all potential sales. While more than half of e-commerce sales have gone up from May to June and growth is expected to continue, e-commerce will not be able to compensate for all the loss.
The pandemic will change the industry landscape as we know it. Nearly 59 percent of respondents believe consolidation will be the emerging market trend post-pandemic.
“We are happy to see sales going up, but the pandemic is far from over,” said Tom Cove, CEO and President of the SFIA. “Many individuals and families have adapted to new activities and sought out fitness equipment and outlets that let them participate under stay-at-home orders. However, until we can get kids back in schools and back on the field, our industry will have to be innovative in its approach to helping Americans stay active and healthy on a regular basis. The pandemic will make everyone be more creative, and we anticipate seeing new innovations that will stem from this situation.”
Return to play expectations were more optimistic in May but dropped in June as many states saw surges of the virus after reopening too quickly. A vaccine is now considered “absolutely essential” for 41 percent of respondents when questioning return to play protocol.
As for gyms and studios, expectations have also changed. In May, only 4 percent of respondents expected gyms to not open until November/December 2020 and in June, that number jumped to 23 percent. Many facilities are now open, but for those that aren’t open, there seems to be more of a push to open at the end of the year or in 2021. The importance of a vaccine for reopening gyms has greatly increased, and 91 percent of respondents believe a mask requirement is most important to reopening. Regardless, gyms are expected to open before the return of youth sports.
To download the full SFIA COVID-19 Industry Impact Report, June 2020, click here.
Photo courtesy Fleet Feet, Schererville, Indiana store/Chicago Tribune
