Revenue is projected to decline, due to price-based competition from foreign manufacturers.
New York, NY (PRWEB) March 23, 2015
The inundation of low-cost sporting goods from global manufacturers, coupled with the decline in consumers' leisure time, has hampered demand for sporting goods over the past five years. As individuals' leisure time decreased, time-strapped consumers struggled to include sporting activities in their daily regimen, which has constrained demand for sporting goods. Furthermore, more retailers are stocking low-cost sporting goods from globally based manufacturers to appeal to budget-conscious consumers as a result of an uptick in demand from downstream markets such as sporting goods stores. While many manufacturers differentiated their product offering by including sporting goods integrated with innovative technologies, price-based competition from global manufacturers still cut into industry revenue growth.
Additionally, the Athletic and Sporting Goods Manufacturing industry is highly fragmented with many manufacturers specializing in a particular sporting activity. “As a result of this trend, few manufacturers had the necessary product portfolio of sporting goods, such as golfing, camping, fishing and winter sporting equipment, to negotiate favourable contracts with downstream markets and provide a one-stop shop to stock retailers' shelves,” IBISWorld Economic Analyst Sarah Turk says in the updated report. Industry operators' fragmented product offerings also prevented many manufacturers from responding quickly to changes in customer preferences for sporting activities. As many budget-conscious consumers limited their sporting goods purchases by fixing their equipment or purchasing used sporting goods, retailers slashed their product prices and lowered their demand for sporting goods. In the five years to 2015, industry revenue is expected to decline. “Profit is anticipated to contract due to volatile plastic prices, a key input commodity for plastic sporting goods, which raised operational costs as industry operators contended with price-based competition from global manufacturers,” Turk says in the report.
In the five years to 2020, industry revenue is forecast to decline. Many provinces and territories will invest in outreach for raising awareness regarding the health benefits of exercise, benefiting the industry. Despite this trend, revenue is projected to continue declining, due to robust price-based competition from foreign manufacturers.
For more information, visit IBISWorld’s Athletic & Sporting Goods Manufacturing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry buys raw materials and transforms them into a range of sporting and athletic goods (except apparel and footwear). Examples include balls for sports (baseball, football, basketball) and outdoor equipment (for fishing, hunting, camping). The finished products are then marketed to wholesalers and retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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