January Results in Equipment…Take a Deep Breath

Golf Datatech recently released the January 2018 On/Off Course Specialty Retail Sales data for the equipment categories, and for some of the biggest segments it was not a pretty picture. Consumables fell 1% in dollars while Clubs were down double digits, with Drivers specifically down 35% and irons falling 15%. While that might look like a horrific start to the new year, there are several extenuating circumstances to consider before running out of the house screaming like your hair is on fire:

  1. January is the smallest month of the year for equipment sales, and thus it is the most volatile and also the easiest to recover from having a slow start.
  2. January 2018 weather was terrible for golf, and we would expect to see a sharp drop in rounds played for the month when they are released in a few days.  Rounds and sales of equipment do not always track together, however a month as poor as this January would likely dampen (pun intended) the enthusiasm of the golfer to buy new product.
  3. In January of 2017 both TaylorMade and Callaway new club launches were already available and selling in the market, while in 2018 both did not hit the market with new models until the month of February, so the comparison’s of one January to the other is without the new product from two of the largest club brands.

So while we never want to get off to a slow start, there is no reason of panic…February and March data will provide significantly better insights into where the year is headed.

Golf Sales thru Q3, 2016

 

Here are the most recent trends of note (thru September 2016)

*Overall US sales of golf products thru the On/Off Course/Online channels continue to lag prior year thru the 3rd quarter of 2016.

*Unit sales are down significantly in most categories while Average Selling Prices (ASP) have moved higher, due to a combination of higher priced new products and a more efficiently managed system for manufacturer’s launching and closing out products.  Less inventory of second/third generation products means fewer “screaming deals” at retail.

*The best performing product category in 2016 is wedges, where sales in value are up mid single digits.  Over the past decade the wedge business has remained healthy as golfers today carry significantly more wedges than the players of years ago.  With the advent of stronger lofts on iron sets an opportunity exists for golfers to carry 3 or 4 wedges rather than “the old days” when a typical player had a pitching wedge and a sand club.

What’s Next?

The US Market in Q4 of 2015 enjoyed some excellent weather across the entire US, driving rounds played higher and bolstering sales, which may create challenging comps for the rest of the year.

In the end, golfers respond to technological breakthroughs, and more than one manufacturer believes they have the products to drive sales to new heights over the next 12 months.  Only time will tell.