Snow Sports Sales Drop 4.4% On The Season

mike lewis

• May 26 2009
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According to SIA, overall sales of snow sports equipment were off 4.4% in dollars and 2% in units for the ‘08/09 season, compared to the previous season. This translates into the sale of approximately 34,000 fewer snowboards. The biggest impact of the tough economic times boiled down to carryover equipment being sold at steep discounts, significantly cutting into retailers’ margins.

According to the report:

SNOW SPORTS MARKET SUMMARY
Overall, snow sports market sales declined 4.4% in dollars and 2% in units for the 2008/09 season.  This season brought in a total of $2.82 billion compared to last season’s $2.95 billion in sales. Current season equipment took the heaviest blow, 75,000 fewer alpine skis, 8,000 fewer Nordic skis, and 34,000 fewer snowboards sold this season.  Carryover equipment sold well as retailers discounted prices and cut margins to the bone to bring in customers and move inventories.  Apparel sales illustrate retailers’ discounting strategies; unit sales increased by 2% while dollar sales decreased almost 6% this season.  Participants bought plenty of hats, gloves, helmets and wax before they hit the slopes at local resorts and accessories sales were close to even with last season.  If there was a bright spot in this difficult season it was the Internet channel, it broadened while specialty shop and chain store sales declined.

Fear about economic security kept consumers, retailers and suppliers in a cautious mood this season.  The economic downturn that began in earnest this October had an unprecedented impact on the snow sports market this season.  Analysis of historical data reveals that less severe economic events in the past have had little impact on the snow sports marketplace.  However, significant reductions in wealth and job insecurity at the highest levels resulting from this particular economic decline predicated a downward shift in consumer spending even in the highest income demographics.  The peculiarities of this recession resulted in strangled credit markets, higher costs and reduced sales in the snow sports market that had significant negative impacts on both retailers and suppliers.  Additionally, first indications of pre-season order activity for next season suggest that retailers are not betting heavily on increased sales for the 2009/10 season.  As a result of this season’s lackluster results, we anticipate some consolidation of retail shops, reduction in chain store fronts, and consolidation of brands.

“Overall, we did great on selling stuff; we just didn’t make enough money on it. Some retailers over bought, then panicked and put stuff on sale early. That was one of the problems. In March, we just ran out of customers. We did do well with selling median priced items like Burton and Rome boards, boots and bindings,” said Bill Langlands, Owner, Darkside Snowboards.

“We saw some growth in our sales this season but we’re having some trouble with past due receivables and pre-season orders are smaller than usual.  We are planning on some mid-season orders next season if snowfall is good,” Ben Anderson, Founder, Icelantic Boards.

Current season equipment sales declined 12% compared to last season and by March 31st inventories of unsold equipment had swelled almost 19% in dollars and 12% in units compared to end of season inventories last year.  Retailers slashed prices on equipment to bring customers in and move inventory.   In fact, consumers purchased more than 1/4 all alpine skis and snowboards sold this season at prices that were even with or below the average retail cost.  Margins in specialty shops were slimmer across all categories this season and average costs increased more than 10% across the board.

“The end of the season was soft for us. Our focus was reducing inventory levels to get in a good position for next year. We also concentrated on delivering customer service and quality to the customers that we did have. Guests were buying the basics; just what they needed and little else. We weren’t on fire sale; we just worked hard on servicing our loyal guests. We have found that peopleare willing to spend more for addedvalue, service, convenience and expertise”, said DerekJohnson, Managing Director, Aspen Skiing Company.

Despite the negative impact the current economic recession had on the snow sports this season, there were some noteworthy trends:

• Reverse camber snowboards made a huge impact on the market this year and reverse camber models like the Skate Banana flew off store shelves despite cautionary spending in other categories.

• Everyone was buying more board underfoot this season as fat ski sales stayed healthy and fat ski systems sales soared

• The AT category, although difficult to track, appears to be growing with a 60% increase in boot sales

• Decent snow kept resorts busy, according to NSAA some even broke attendance records this season

• Gloves, helmets, wax, and goggles sales grew this season as participants ignored the economy and paid attention to the snow on the slopes

The market data presented in this report comes from the SIA Retail Audit conducted by the Leisure Trends Group.  The Retail Audit consists of data gathered directly from the Point of Sale systems of about 1/3 of the snow sports retailers in the U.S. market.  Each season, Leisure Trends gathers data between August 1 and March 31 from a representative panel of more than 1,200 snow sports retailers who provide sales data directly from their Point of Sale systems.  The panel and the method for extrapolating the results out to the entire industry is based on a triennial census of snow sports retailers designed to accurately define the size and structure of the snow sports retail marketplace.  SIA maintains these data for members down to the product level.  For more information about SIA’s Retail Audit information please contact Kelly Davis, SIA’s Director of Research at KDavis@snowsports.org.