Not necessarily revealing anything new to those in the trenches, the Sporting Goods Manufacturers Association in an annual "State of the Industry" report noted that home fitness equipment sales were flat for the first time in years although the long-term outlook is still good.
In wholesale dollars, the overall exercise equipment category hit $4.7 billion in 2007, nearly flat compared to 2006. Sales of home equipment dropped slightly, while sales commercially, including to schools, hotels and the vertical market, jumped slightly.
As a whole, the sporting goods market represented by the SGMA, which includes exercise equipment, hit $68.4 billion (wholesale) -- up 2.9 percent -- and is expected to climb slightly in 2008, reaching $69.6 billion. In general, the industry's growth is greater than the current 2.2 percent rate of growth for the U.S. Gross Domestic Product for non-durable goods. Exercise equipment remains the No. 1 equipment category. The information was reported at SGMA's Team Sports Show in Las Vegas.
The five "hottest" sports for sales growth in 2008, according to SGMA vendor predictions, include yoga/Pilates, followed closely by fitness walking. Next is running, then lacrosse, with strength training tight on its heels.
"It's good that the Olympic Games are being held this year," SGMA CEO Tom Cove said in a statement. "Not only will the games highlight the glory of sports and inspire millions of people to get involved, but they will provide a wonderful showcase for the technological achievements of the sporting goods industry."
In less positive observations, the biggest challenges called out in the survey were dealing with slower consumer spending, availability of skilled labor/labor costs and availability of quality materials/material costs.
Also noted will be how the rising cost of oil will impact energy prices, which will be passed on to the consumer.
For fitness equipment, technology remains a driver but technology also is a distraction with TVs, cell phones, computers and other devices potentially taking the dollars that may have been spent on gyms.
SGMA predicts very slow growth of around 1 percent for exercise equipment in 2008, way down from growth of 12 percent in the two-year period from 2004 to 2006. But the market is still seen as a fundamentally strong one. Just over a decade ago, the SGMA found that almost half of all U.S. households owned at least one piece of exercise equipment and, more importantly, that it was used regularly. In 2007, the association found that almost 40 percent of treadmill users and 36 percent of stationary bike users were home users.
SNEWS® View: With nearly everything affected by the price of oil and steel, equipment prices are bound to go up. That may in fact be a good thing since the retailers SNEWS® has spoken to indicate that the higher-priced equipment is what is still generally selling. In past years, some suppliers have felt obligated to shoot for cheap-cheaper-cheapest, leaving its retailers feeling the need to compete with sporting goods and mass channels. That is simply the wrong approach, especially in an economy we currently have. Specialty retailers should indeed see themselves as boutiques with something unique and different that in fact may cost a little more. They, of course, must also be prepared to offer the service and care to accompany higher prices and a boutique shopping experience, but that in the end will help the industry shine.