Higher discretionary income will facilitate the purchase of more sporting goods
New York, NY (PRWEB) July 15, 2014
During the past five years, the Sporting Goods Wholesaling industry has grappled with fewer consumers having sufficient leisure time to allocate toward sports and other recreational activities. This trend, which has constrained demand for sporting goods, was further exacerbated by significant changes in the industry's downstream markets over the past five years. For example, sporting goods retailers have moved toward chain stores over the period, which has enabled this downstream market to negotiate low-cost sporting goods prices from wholesalers, thereby limiting industry revenue growth. Additionally, as many retailers have developed innovative tools that measure customer demographics and inventory turnover, they have moved away from bulk purchases of sporting goods and toward more small volume purchases of high-turnover sporting goods.
Nevertheless, the emergence of chain sporting goods stores has spurred wholesaler demand by facilitating an extensive distribution network required to respond to quick product turnover and stock chain retailers' shelves. However, industry revenue is expected to decline an annualized 3.5% to $3.2 billion during the five years to 2014, due to the inundation of online retailers, particularly sporting goods manufacturers that directly sold their product to consumers, thereby engaging in wholesale bypass. Despite this trend, in 2014, industry revenue is anticipated to grow 2.0%, due to the Canadian government likely implementing favourable trade policies. For example, in April 2013, the government eliminated tariffs for sports equipment, which enabled wholesalers to secure low-cost sporting goods from global manufacturers. Nevertheless, wholesalers are expected to pass on cost savings to consumers in the form of lower prices for sporting goods, which will limit the extent to which wholesalers can markup product pricing. As a result, the average industry profit margin is expected to slightly decline, from 5.1% of industry revenue in 2009 to 4.7% in 2014.
The Sporting Goods Wholesaling industry is characterized by low market share concentration. During the five years to 2019, industry revenue is forecast to grow at an annualized rate of 2.0% to $3.5 billion. Over the next five years, many health-conscious consumers will have more discretionary income to purchase sporting goods equipment to be used for exercise; however, the aging of the population will constrain demand, due to older individuals being less likely to participate in sports.
For more information, visit IBISWorld’s Sporting Goods Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
The Sporting Goods Wholesaling industry wholesales a range of sporting and recreational goods and accessories, such as billiards equipment, pool supplies, sporting firearms and ammunition, and marine craft and equipment. This industry does not include wholesalers of athletic apparel and footwear, automobiles, other motor vehicles or transportation equipment.
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