William L. Coney Blog: Report: 2016 Golf Equipment Sales

Monday, October 17, 2016

Report: 2016 Golf Equipment Sales

With enough of an agenda it's easy to spin anything. Such is the case with the state of golf itself.

Plenty of people will tell you that golf is in decline. Those prone to hyperbole might even call it a tailspin. They'll point to Nike's sudden exit from the equipment space and the adidas decision to sell TM and get out of hardgoods. Some will cherrypick participation stats and that fact that courses are closing faster than new ones rise to replace them.

Doom and gloom, folks.

Those looking to paint a positive picture often point to the rise of Topgolf. The Callaway-backed golf entertainment venues have apparently done well enough to spawn the TaylorMade-backed competitor called Drive Shack. While the long-term impact of those places remains unknown, the same people can also point to an actual increase in the number of rounds played along with the woefully nebulous metrics surrounding the number of people who have expressed interest in playing golf.

The worst is behind us.

In some respects, the state of golf is what you want it to be. There are positive signs and negative signs, but we're focused on equipment, and we like concrete numbers.

Fortunately, for those of you who like numbers as well, GolfDatatech has published a few tidbits about the 2016 golf market on its website. It's far from comprehensive, but it does provide a window into the current state of the golf equipment market.

Keeping in mind, that unless otherwise noted, the figures reflect YTD Dollar Sales through August 2016 compared to 2015 through the same period). Let's take a look.

Hard Goods (Retail Dollar Sales YTD)

Drivers - Down 11.3%
Fairway Woods - Down 19.2%
Hybrids - Down - 11.5%
Irons - Down - 5.4%
Putters Down - 7.4%
Wedges Up - 4.9%

Soft Goods

Footwear - Down 7.6%
Golf Gloves - Down 2.6%
Golf Bags - Down 8.9%

Golf Ball

Dollar Sales - Down 6.1%
Unit Sales - Down 8.1%
Average per dozen selling price - Up 2.2% to $31.00

Also mentioned by Datatech is the fact that rounds played are up 2.0% (YTD July 2016 vs. July 2015). When you consider how bad winter before last was, I'm not sure how much of a positive that really is. It's also true that some parts of the country had a bad run of weather in June of this year, so on balance, it's more good than bad.

It should also be pointed out that Datatech doesn't cover the entire market. It doesn't collect data from big box stores such as Dick's and Golf Galaxy. It doesn't have any insight into direct to consumer sales both from big OEMs or from smaller companies like Snell Golf. Finally, Datatech doesn't tell us what the second-hand market, most notably eBay, looks like.

For what it's worth, some on the industry side have told me that Datatech's numbers make the declines appear worse than their reality. Others have told me that it's still fairly representative of the market as a whole.

So what do we make of all this?

There's been some chatter this season about macroeconomic factors. The weather, the economy, uneasiness over the upcoming election, some or all of that could certainly explain the downward trend. Whatever the excuse, the bottom line is that golfers have spent, significantly less, on golf equipment this season (even while apparently playing a bit more golf). For equipment manufacturers, this is not good news.

It's easy to develop a reasonable theory on hard goods. Perceived lack of innovation, plus that other economic stuff, and golfers are content to stick with what they have for a bit longer. It makes sense that we're not spending on golf clubs.

The soft goods, that's a bit more puzzling. If you're playing golf, gloves wear, so do shoes. And while I suppose we can stretch out the life of a golf bag a bit, nothing in golf is more disposable than the golf ball. The decline in unit sales within that category is perhaps the most puzzling of all.

Are direct to consumer sales negatively influencing the numbers? Are golfers doing more of their buying at big box? Is the equipment business down as precipitously as the numbers suggest, or does the industry simply need better metrics.

My read on what I see and what I'm being told...the industry still isn't 100% healthy, but as companies and the industry itself contract and right size, I believe we're inching closer to a new baseline. Whether or not that means we've hit bottom remains to be seen.