Posted: July 20, 2007

Athletics (RWire): State of Sport Part I: the Running Industry

According to the U.S. Census Bureau and reported in the July 18 NSGA Sporting Goods Alert, 2006 was a strong year for the American sporting goods industry with a total of $35.24 billion in retail sales (up 13% over 2005). That growth was the result of 4 years of positive momentum with increases of 3.1% in 2003, 6.2% in 2004 and 8.1% in 2005. Preliminary figures from the Monthly Retail Trade Survey for the first 5 months of 2007 indicate a continuation of this trend with 6.9% growth compared to the same period in 2006. The Sporting Goods Manufacturers Association (SGMA-2) reports a 5.8% increase in the industry for 2006 as defined by manufacturers’ sales in the U.S. ($65.3 billion). This percentage growth compares favorably to the gross domestic product of 3.6%. Apparel SGMA attributes much of the overall growth to apparel. “The sports apparel category, which grew by 8.2% in 2006 to $28.8 billion and has increased by 20% over the past two years, is reaping the benefits of technological advances. Consumers have increasingly responded to performance fabrics that provide compression, moisture management and temperature control. Stylish designs have also helped make sports apparel fashionable for everyday wear” – SGMA (2). The Sporting Goods Market in 2007 (NSGA-1) which is based on retail sales in the U.S. projected from consumer interviews, estimates that sports clothing purchases totaled $10.699 billion in 2006, a decline of 2% compared to 2005. Running clothing purchases during the same time period fared much better with an increase of 11% to $726.7 million in 2006. Footwear According to SGMA (2), “The athletic footwear segment posted an increase in wholesale shipments of 3% to $12.3 billion, but this represented a considerable slowdown from the 19% gain it experienced in 2005.” The largest footwear category – running shoes – experienced a decline from $3.150 billion in 2005 to $3.054 billion in 2006 (SGMA-3). The NSGA (1) estimate for retail sales of running and jogging shoes is $2.259 billion for 2006, an increase of 5% over 2005. The corresponding total for all athletic footwear is $16.9 billion, an increase of 8%. Threats and Opportunities for the Running Industry “The underlying challenge facing the sporting goods industry is that participation in almost all forms of sports and outdoor activities is stagnant and, in many cases, declining“ – SGMA (2). As long as the running industry pays attention to threats and opportunities, it should be able to avoid the stagnation and decline experienced by other mainstay sports. In 2006, and to date in 2007, running has had excellent growth in areas of running participation (see figures below), running events (to be detailed in Parts II and III of this series) and running media. The latter is illustrated by MPA statistics showing total ad revenue for Runner’s World of $66.57 million for 2006, an increase of 14.8% over the previous year. Running has several advantages including the ability to morph into a competitive sport, recreational sport or healthy activity for any demographic. Intriguing technological products and services such as GPS and Google Earth, Nike+ iPod system, transponder timing systems, Adidas I computer technology for footwear, “performance” fabrics and recycled materials for clothing and shoes have allowed running to stay interesting and up-to-date in recent years. Running can also be front and center in the widespread movement to connect effective and affordable fitness activities to people of all types to improve the nation’s health. And with the backdrop of 2004 Olympic Marathon medals by Americans Meb Keflezighi and Deena Kastor, the competitive side of the sport will become more prominent beginning with the Olympic Trials for the Marathon in New York this November (men) and next April in Boston (women). There will continue to be pressures affecting the smaller retailers and vendors. The proliferation of takeovers and mergers are making the big companies stronger. Internet sales are also increasing substantially, although that sales channel has been embraced successfully by some smaller retailers. If the trend towards fewer and bigger stores means fewer running related items carried in the sports store universe or fewer independent specialty retailers who serve as a gateway and community base for runners, then the running industry could suffer. In spite of concerns such as the above, SGMA predicts healthy growth for the 2007 sporting goods industry at around 6%. Running USA’s Road Running Information Center also sees the positive momentum noted in 2006 U.S. running events to continue in 2007. New Studies Offer More Answers to ‘How Many Runners Are There?’   2006 + / - 2005 % New SGMA (1) Total Runners* Run/Jog at least once 37,922,000 up 9.4% New SGMA (1) Core Participants Run/Jog 50 days/yr 22,120,000 New SGMA (1) Frequent Runners Run/Jog 100+ days/yr 15,176,000 New OIF (1) All Runners* Run/Jog at least once 38,525,000 up 8% New OIF (1) Road Runners Run/Jog at least once 37,922,000 New OIF (1) Trail Runners Run/Jog at least once 4,436,000   ASD (1) All Runners Run/Jog at least once 40,464,000 up 7% ASD (1) Frequent Runners Run/Jog 100+ days/yr 12,401,000 up 7/1% ASD (1) Trail Runners Run/Jog at least once 5,911,000 NSGA (2) All Runners Run/Jog 6 days/yr 28,787,000 down 1.6 % NSGA (2) Frequent Runners Run/Jog 110+ days/yr 7,064,000 up 2% * The new SGMA and Outdoor Industry numbers come from the same data source (see details below) For the last 20 years the RRIC has relied on American Sports Data (ASD) and National Sporting Goods Association (NSGA) to give running numbers a context for comparison. This year we have many more choices (see chart above) which include analysis and data based on a new online sports participation survey completed by 60,169 Americans in the winter of 2007. The survey was commissioned by a partnership of 5 trade groups including SGMA and the Outdoor Industry Foundation (OIF). Both organizations have massaged the data in slightly different ways to give us a more complete picture of the running population. Which sports participation studies are more accurate or useful? It will take a few years of working with the results of the new participation survey to be able to evaluate it. The ASD and NSGA studies will continue to be important for historical context as a minimum. In any given year there may be some inconsistency that suggests inaccurate results so it’s useful to have several perspectives. Since this is early days for the survey partnership there will likely be some adjustments as surveyors attempt to get panels that match the bigger and/or most relevant population. For example, the OIF reports that future participation studies ‘will strive for a greater youth sample’. Unless one is in the trail running PR business, runner insiders will probably prefer the new OIF report to the previous one that estimated a trail runner population of 40 million. Generally this proliferation of runner data is very helpful and gives the running industry a deeper and broader view of the sport from the participation perspective. The online accessibility of much of this data will ensure its usefulness for many purposes. The running industry will also appreciate seeing the Running/Jogging category at the top of several Outdoor Industry lists published recently in “Next Generation of Outdoor Participants – 2007” (OIF). Profile of American Outdoor Participants, from OIF (1) Favorite Outdoor Activities of All Americans by Number of Outings in 2006 total per participant 1   Running/Jogging/Trail Running 3.65 billion outings 95  per runner 2   Bicycling (any type) 2.82 billion outings 66 per cyclist 3   Fishing (any type) 1.17 billion outings 23 per angler 4   Skateboarding 712 million outings 64 per skateboarder Favorite Outdoor Activities of American Youth (age 6 to 17) in 2006 1   Bicycling (any type) 1.47 billion outings 78 per cyclist 2   Running/Jogging/Trail Running 1.17 billion outings 94 per runner 3   Skateboarding 581 million outings 66 per skateboarder 4   Fishing (any type) 314 million outings 20 per angler Favorite Outdoor Activities of Young Adults (U.S. age 18 to 24) in 2006 1   Running/Jogging/Trail Running 654 million outings 86 per runner 2   Bicycling (any type) 227 million outings 73 per cyclist 3   Fishing (any type) 130 million outings 28 per angler 4   Skateboarding 73 million outings 75 per skateboarder See continuation of the State of Sport of Running in upcoming Running USA wires: Part II - Runner Demographic Trends and Part III - Largest Races Lists. Sources for Part I SGMA = Sporting Goods Manufacturers Association. (1) = New 2007 SGMA Sports & Fitness Participation Report (from partnership with 4 other trade groups .– National Golf Foundation, SnowSports Industry Assoc., U.S. Tennis Assoc. and Outdoor Industry Association). Online survey given to larger sample of 60,000+ who are part of a Synovate panel representing the U.S. population. Sports surveyed for the first time by SGMA include marathon and triathlon – although nothing has been published yet relating to marathons. (2) = Insight07 State of the Industry which used ASD participation data (see below). (3) = Manufacturer Sales by Category Report – 2007 Edition, formerly called Recreation Market Report. For more information go to SGMA.com. ASD = American Sports Data Inc. (1) = American Sports Data 2006 Superstudy of Sports Participation, Volumes I and III. To obtain information on sports demographic products and services offered, contact Harvey Lauer at American Sports Data, Inc., 15 Kent Dr, Cortlandt Manor, NY 10567; (914) 461-3271 or go to AmericanSportsData.com NSGA = National Sporting Goods Association. (1) = NSGA Sporting Goods Market in 2007, (2) = NSGA Sports Participation in 2006, Series I. To obtain information on any of the NSGA products and services email info@nsga.org, phone (847) 296-6742 or go to NSGA.org. OIF = Outdoor Industry Foundation, Next Generation of Outdoor Participants - 2007, published June 2007. Data is from new sports participation survey partnership described in SGMA section above. A full copy of this report can be downloaded from the Outdoor Industry Foundation Website, www.outdoorindustryfoundation. MPA = Magazine Publishers of America – Magazine ad revenue year to year by magazine title and other publishing stats can be found on magazine.org. RRIC = Running USA's Road Running Information Center. State of the Sport reports, many types of running data and lists of the Largest Races from past years can be found on RunningUSA.org in the 'Statistics' section. For other questions about running trends and demographics, contact Ryan Lamppa [ryan@runningusa.org] or Linda Honikman [rric@runningusa.org]. Ryan Lamppa, Running USA Media Director (805) 696-6232; Fax = (805) 659-0016 Ryan@RunningUSA.org www.RunningUSA.org. Subscribe to the Runner's Web Weekly Digest