New golf equipment data thru the month of August 2018 from Golf Datatech indicates the golf equipment business continues to roll along, with sales increases across almost every product category, and total sales up almost 8% on a YTD basis.
Green Grass grew by 7% while Off Course Specialty stores were up over 9%. After taking more than a year to find their footing, the Specialty Channel has adjusted to Golfsmith closures from the back half of 2016, and is now solidly in the black. What is interesting to note is that many of the Specialty Stores that remained in the business last year saw healthy sales increases, however the upside in their individual stores did not offset the decline impacting the category in total as the Golfsmith stores closed.
Golf Club sales are up double digits YTD, led by wedges and irons, while woods and putters are relatively flat. On the consumable side, golf balls and golf gloves are both trending positively in both units and dollars, while semi durable purchases (bags and footwear) are up significantly more.
What is driving Equipment Sales so much higher?
Golf Datatech believes Golf Equipment sales are being impacted by a variety of factors:
-Improving economy, with GDP running a full percentage point higher than it was for the same quarter prior year
-More money in the pockets of the US consumer because of the tax cuts
-Substantially higher net asset values as their investments and houses appreciated
-Consumer Confidence is running high
What Potential Headwinds Exist for the rest of 2018?
-Potential impact of tariffs on raw materials and components used for golf clubs
-Potential economic slowdown due to the impact of tariffs on prices
-Random acts of political malfeasance…in today’s world anything is possible.
What is the most likely outcome for the rest of 2018?
The November elections (and no one can predict what else) may cause a change in direction on the macro level, however by the time that occurs the bulk of 2018 will be in the books and it will be remembered as the year when golf equipment sales bounced back in a big way.