No Xmas in July

Industry

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2010 World Cup:

No Xmas in July

The 2010 FIFA World Cup was an exhilarating, unforgettable time of nation building and national pride … but sadly the SA sport, outdoor and lifestyle retailers will remember this period for other reasons.

M

ost South Africans will agree that the wonderful, positive energy and national pride during the World Cup period kept us on a month-long high and presented us with an once-in-a-lifetime experience that we would always cherish. For that, most of us will always be grateful.

The positive message we sent out during this period will hopefully convince the rest of the world that SA is a fascinating, hospitable and yes, safe, country to visit so that we’ll be flooded with tourists in future.

Unfortunately, from reports we received, it emerged that sport, outdoor and lifestyle retailers did not experience the World Cup bonanza everybody had hoped for. And that is the most polite way we can convey the feedback we got from most of the respondents to our questions on industry sales during the World Cup period.

Sports Trader August/September 2010

Yes, there were those for whom it was a bumper Xmas in July. And that is wonderful news. But, most of the respondents described June-July sales with one word: bad. Others use two words: very bad.

“We hope that visitors to SA found out that we are not complete savages, took note of what we have to offer and return to SA in the near future with like minded outdoor friends.”

In fact, 84% of the respondents found that sales during the June-July World Cup period were lower than over the December holiday period at the end of last year — and as you may remember, it wasn’t a very good Christmas season. More than half (52%) of the respondents reported that their sales were lower than June-July 2009, when sales were already slow due to the economy, 16% said they did about the same as the same period last year and 13% said they did better than June-July last year, but worse than in December.

On the bright side: 13% respondents did experience fantastic sales and said June-July was better than December 2009, while 6% said

that their sales were about the same as in December.

Most respondents who experienced good sales are sport retailers who mainly benefitted from the sale of Bafana Bafana shirts (one had a big corporate order). A third of the sport retailers responded that sales were excellent (20%) or good (13%), better than over Christmas — but more than half of the sport retailers said their sales were worse than in June-July 2009. Apart from the 17% who reported excellent sales, outdoor retailers seemed to have been the most disappointed with 67% reporting worse sales than the same period last year.

Stocking Bafana Bafana replica was not a guarantee for sales: only 19% of the retailers who did stock Bafana replica reported a fantastic June-July, better than December, while 75% said they did worse than in December — 37% Bafana stockists said their sales were lower than in June-July last year, while 13% did about the same as the corresponding period last year and 25% said they did better than same period last year, but worse than in December.

Three-quarters of the retailers that stocked home team shirts felt that they could have done better if they didn’t run out of stock.

One stockist of Bafana shirts commented: “We could have done better if stocks were delivered on time, but due to the Spoornet strike

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Industry

Who made the money?

SOMEBODY must have been making money during the 2010 World Cup period as Statistics SA reports that retail sales in June rose the most in three years — 7.4% more than June last year.

We all know that vuvuzelas blasted themselves onto the world markets and that everybody associated with them can trumpet their success on global markets. Even the Pope could be greeted by them during his visit to the UK … but Rev Vincent Nichols, the head of the Roman Catholic Church in England and Wales, asked people to leave them at home during the Papal state visit. Big international retailers sold thousands and distributor contracts are being signed as far afield as Denmark.

As can be guessed from the reports of the run on new TV sets during the World Cup, SA retailers in the household furniture, appliances and equipment subsector also had a most enjoyable World Cup, with a 17.7% gain.

According to Statistics SA of retailers in the textiles, clothing, footwear and leather goods subsector rose 13%, report Statistics SA. Respondents to our survey were not among these lucky one’s though, as 63% reported sales that were the same as, or worse than, June-July 2009.

Overall, GDP growth was lower than expected and according to Reserve Bank deputy governor Daniel Mminele economic growth should average about 2.9% this year, following 4.6% growth during the first quarter.

stock was late.” Another complained: “Despite orders given to manufactures they did not supply enough. It seems that they only took care of big retailers and not small retailers like us.”

Others complain about the competition from counterfeiters selling cheaper versions (despite the FIFA clampdowns at customs!) “The demand for fake Bafana Bafana replicas was higher than the original top. Every street corner sold Bafana fakes,” complained a respondent.

Those that stocked items like vuvuzelas and flags seemed to have benefitted most, as 50% reported better sales than in the same period last year, a quarter of them reporting fantastic sales, better than over the Christmas period.

It was a toss-up whether retailers that stocked other Official Licensed Products (OLP) benefitted: 17% had bumper sales, 33% did better than June-July 2009, but worse than December, while 50% said sales were worse than June-July last year.

It often depended on what was stocked. For example, a retailer whose sales in 2010 were about 30% higher than in June-July 2009 said: “I stocked the Brazil Bomber Jackets from Skye, which sold very well, but sales of the Zakumi slops were horrible. Sales for SA flag mirror covers were average, but I have a little left over.”

Replica from other World Cup teams was also not revenue spinners: only 6% respondents who stocked other team shirts did better than in December, while 63% did the same or worse than in June-July last year. Team shirts from Argentina, Brazil, England, Spain, Portugal, Germany, Ghana and Italy were the most popular stock items amongst our respondents.

As one would expect, stores that are located near to a fan park or public viewing area did better than those far away from the bustling crowds. But again, proximity to a fan park or location in a city where games were played did not guarantee sales: while 17% of respondents close to fan parks and 8% in cities where games were played reported excellent sales (better than December), 50% and 58% respectively said that they sold less than in June-July 2009.

“We are located in the suburbs of Cape Town, away from the city and fan parks. Our biggest sellers were ordinary tops with South African prints and registered Bafana Bafana tops,” said another respondent. “We lost many sales of SA flag scarves, which initially went slowly, but from a week before the start of the World Cup we were sold out and battled to get more stock. Still, it was a very exciting period!”

Another retailer, situated in a mall, close to a fan park, experienced excellent sales of World Cup replica items, but reports “(sales of) our normal products, e.g. footwear and clothing, was down for the same period compared to last year. It would appear that other shops which did not stock World Cup products were also down on the previous year’s figures.”

Several of the respondents commented that their regular customers didn’t come to shop and they were therefore down on the items they usually sell during this period – except an outdoor chain that seemed to have benefitted from the South Africans who used the long school and university holiday to get away from the cities.

But, for most retail respondents June-July seems to have been a lonely time as their normal customers stayed glued to their

TV screens and did not go shopping or devote time to leisure or sporting activities. Nor did the SA holidaymakers who would normally travel to coastal resorts or game parks over the June-July holiday make the annual pilgrimage in their usual numbers.

What made it worse was that shopping malls stayed open later and mall traders therefore had to pay staff overtime — or work longer hours — without seeing the benefit of increased sales. They can only hope that the usual winter customers would catch up on the goods they didn’t purchase during the World Cup as the holiday ended, so that everybody can get back to normal trading.

But, there is hope for a positive outcome: “that visitors to SA found out that we are not complete savages, took note of what we have to offer and return to SA in the near future with like minded outdoor friends,” says an outdoor retailer.

Sports Trader August/September 2010