By Thomas J. Ryan

<span style="color: #9e9e9e;">The May edition of the COVID-19 Impact Survey from the World Federation of the Sporting Goods Industry (WFSGI) finds 37 percent of global sports industry leaders see their business dropping by 50 percent in June. While dismal, that marks an improving trend versus the April survey, the nearly 50 percent that had expected May sales to drop 50 percent.

The report is the second in a series of monthly pulse surveys the Switzerland-based group plans to conduct with its members. The survey explores the impact of the pandemic on the sector and supply chains. The number of respondents was not disclosed.

“The results of our May pulse survey show that COVID-19 is, as expected, having a sustained negative impact on our industry,” said WFSGI President, Robbert de Kock, in a statement. However, there are flickers of positive information such as the partial recovery of supply chain disruption in Europe and South Asia that seem to suggest we are moving toward the recovery period.”

Business Conditions
Exploring sales, business forecasts, cash flow, and demand, the survey found:

  • COVID-19 is forecast to impact 90 percent of respondent’s business;
  • The most affected regions for respondents remains Europe, where 80 percent expect to see a drop in their business in June and North America, where 70 percent of respondents saw a June decline. That’s a slightly more optimistic assessment than the April survey when declines of 95 percent were seen for Europe for the month of May and 77 percent in North America.
  • Ten percent did not expect a recovery, worsening from the 4.6 percent not expecting a recovery in the April survey. The percentage of respondents expect their business to recover 20 percent, and 50 percent remain roughly the same as last month. While 4.5 percent saw their business recover by 90 percent in the April survey, 7.5 percent did so in the May survey.
  • Over 77 percent of respondents are challenged by low cash flow, still an improvement versus the over 86 percent citing cash flow challenges in the April survey.
  • Around 80 percent of respondents see decreasing orders from customers in Europe and North America. Compared to last month, the situation for Europe and North America has slightly improved by around 10 percent. This number is lower (around 30 percent) for Latin America, the Far East and South Asia. While the situation remains the same for Latin America, it worsened for the Far East, South Asia and the African and Middle East regions.

Mitigation Strategies
As far as mitigation strategies, the top priority remains to increase online sales, cited by 64 percent of respondents in the May survey, down from 77 percent in the April survey. The second highest priority for the second straight month was canceling orders, cited by 47 percent, about even with the 46 percent found in the April survey.

The remaining priorities were clearing inventory to maintain cash, cited by 46 percent in the May survey; keeping minimum inventories and waiting out the recovery, 39 percent; and exploiting market opportunities in the recovering Asia markets, 37 percent.

Regarding mitigation strategies specifically around the supply chain, close to 60 percent indicated they plan to decrease the business volume for each of their suppliers but would try to provide business for all of them, similar to the findings in the prior month’s survey. Forty-six percent planned to defer payments, down from 60 percent in the April survey. Thirty-six percent were looking to consolidate the supply base and keep only strategic partners, up from 30 percent in the April survey.

Other Findings In The Survey:

  • Outdoors, running and walking sustain appeal post-COVID-19 — Asked which product categories will prevail after the pandemic, Outdoor led the way cited by 75 percent of respondents (67 percent in April survey). Running fell to second, at 64 percent, down from 77 percent in the April survey. Walking was again third but also lost ground at 36 percent, down from 43 perfect in the April survey. Cycling and swimming were also seen as popular activities after the pandemic. Coming in lower were global football (soccer) at 10.7 percent, down from 20 percent in the April survey, and basketball, at 3.6 percent, down from 16.7 percent in the April survey.
  • Pricing key driver post-COVID-19 — Asked what would be the emerging market trends after the pandemic, the top answer selected for May was price point-centric measures, chosen by 54 percent of respondents and doubly as important as the April survey. Falling to second was environmentally-friendly products cited by 50 percent of respondents, down from 70 percent in the April survey. Thirty-two percent thought the most important trend would be to recycle economies, also down from 47 percent in the April survey. Around 25 percent cited felt fit/comfort and the same percentage cited functional-driven product.

The WFSGI May 2020 COVID-19 Impact Survey is here. The April 2020 COVID-19 Impact Survey is here.