STATE OF THE SNOW SPORTS MARKET November, 2011
The Bad News Unemployment, unstable stock market, flat wages, global and domestic economic slowdown and low consumer confidence • National unemployment rate = 9%
• Wage growth at a 10 year low • Prices for energy, food, and apparel likely to increase significantly • Consumer Confidence low and declining • Production costs rising
Sources: Bureau of Labor Statistics Unemployment Situation, employment by educational attainment, Nov 2011 –Seasonally Adjusted. U.S. Census Bureau, Conference Board Consumer Confidence Survey Oct 2011
The Good News La Niña is back for 2011/2012. The snow sports market had a record season in 2010/2011 due to La Niña conditions. •
Above average snowfall predicted
•
Demographics – Snow sports participants doing (relatively) very well
•
Good momentum - last season broke sales and participation records
•
Leaner inventories lead to stronger prices and higher retail margins
•
Pre-season orders strong and early season sales reports positive
Sources: SIA RetailTRAK, Kottke End of Season Report 2011,
The Snow Sports Market The Snow Sports market set a new record in the 2010/2011 season with $3.295 billion in sales Channels: Specialty, $2B - up 9% in units and up 14% in dollars Internet, $652M - up 6% in units and up 9% in dollars Chain Stores, $624M – up 7% in units and up 11% in dollars
Categories Apparel, $1.2B - up 7% in units and up 11% in dollars Accessories, $1.2B - up 9% in units and up 14% in dollars Equipment, $902M - up 3% in units and up 13% in dollars Retail Births and Deaths: 236 buying managements went out of business in 2008 and 2009. 96 new buying managements opened in 2008 and 2009. Net difference of 140 buying managements in 2008 and 2009. Currently there are 3603 snow sports buying managements with 5222 storefronts. Margins: Specialty snow sports margins were up 7% overall through the 2010/2011 season. Apparel margins up 11%, equipment margins up 8%, and accessories margins up 4% Inventory units are down 19% in equipment, and down 1% in accessories and apparel Source: *SIA RetailTRAK™ BY The Leisure Trends Group, August to March 2010/2011, **SIA Retail Database 2011
Regional Sales West Specialty Sales $770M, up 19%
Northeast Specialty Sales $584M, up 17% Midwest Specialty Sales $328M, up 9% South Specialty Sales $335M, up 4%
Source: SIA RetailTRAK by Leisure Trends Group , Topline Regional Category
2011/2012 WEATHER: LA NIĂ‘A CONDITIONS Excellent Snowfall Across the U.S. This Season
Source: National Oceanographic and Atmospheric Administration, Climate Prediction Center, ENSO
Snow Sports Participation by Sport Number of Participants ('000s)
14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Skiing (Cross-Country) Skiing (Alpine/Downhill) Skiing (Freestyle) Snowboarding Snowshoeing Telemarking (Downhill)
2006/2007 3,530 10,362 2,817 6,841 2,400 1,173
2007/2008 3,848 10,346 2,711 7,159 2,922 1,435
2008/2009 4,157 10,919 2,950 7,421 3,431 1,482
2009/2010 4,530 11,504 3,647 8,196 3,823 1,821
• Total projected participation during the 2009/2010 season was 21,226,000. In addition 10,500,000 people considered themselves skiers, snowboarders, or snowshoers but did not participate. • 60.5 million skier/rider visits Source: SIA Single Sports Reports, The Physical Activity Council 2011 8
Looking Ahead: Threats and Opportunities Growth in the market after a record season ?
Participation growth in the face of the retirement of the baby boomers? Leaner inventories and stronger prices? Production costs? Climate change? Recession?