CONSUMER SPENDING
THE SPORT MARKET IN THE UK INCREASED BY 15 PER CENT IN VALUE TERMS BETWEEN 2007 AND 2012 – THE ONLINE SECTOR IS BECOMING A MAJOR DRIVER
According to the Office for National
Statistics, the expansion in the health and fitness market coincided with an increase, in healthy life expectancy of two years between 2005 and 2010. In 2011, both sport-related clothing
and footwear increased very strongly, by 10 per cent and six per cent respectively. Over the six-year period, the aforemen- tioned categories increased by 22 per cent and 16 per cent correspondingly. However, the market was not just
driven by the Olympics-related demand. A number of outdoor sport retailers in the North of England are developing worldwide reputations. One of them – Berghaus – aims to reach a turnover of
US$500m (£330m, 384m) within the next 10 years and become one of the top five global outdoors brands. Half of its sales are exported to 45 countries, employing 230 people. Another retailer – Barbour – exports to 40 countries, generating a £90m (104.7m, US$136.5m) turnover (2010) and employing 550 people in its overall retailing and manufacturing operations.
INTERNET SPEARHEADS SALES
Another factor that changes as well as drives the market is fast increasing inter- net sales, which challenge the supremacy of the market's street operators. In October 2012, despite the Olympic
Table 2: Consumer Expenditure on Sport-Related Goods and Services (% change) % change
Admissions Sports goods Bicycles Boats
5
0 8 3
12 3
1 3 6
6 6
The low-cost operators' business model has boosted the health and fitness sector
effect, declining profits forced JJB into administration. In other cases, such as Adidas – the official sportswear partner of the Games – the Olympics became a positive stimulus for the company‘s sales, which are expected to grow by more than 15 per cent in the current financial year. Similarly, sales in Sports Direct increased not only because of the beneficial effect of the Games but also because of the company‘s strong internet-sales profile.
2007 2008 2009 2010 2011 2012 2012/07 10 -5
-16 -13 37 -10 -2 6 4
4
Other participation excluding health & fitness 12 -5 Health & Fitness Clothing sales Footwear sales Travel
Books and magazines Newspapers
Gambling: off course
Gambling: on course and online TOTAL
72
-9 8 3 3 9 0
TV and video rental, satellite/cable subscriptions, licences -2 5 Skiing holidays
5 -6 -2 -6 -1 11 -2 1
-4 -5 1 -22 8 4 0
-1 4
-9 12 7 -4 1
-2 -2 7 8
6
129 22 4 4
SPORTS MANAGEMENT HANDBOOK 2013 4 0
4 1
8
10 4 6
-7 65 36 108 -12 32 -3
-18 26 -17 2
2 5 0
-2 4
-7 -5 -1 0
31 22 16 21 -9 -5
30 -13
-15 -3 -5 11 -14 9
-3 5
22 12 91 4
7 15 SWEEPSTAKES
Although off-course gambling increased substantially in 2012 by 11 per cent, the bigger picture is that it declined over the six-year period by 14 per cent. The most dynamic element of the sport gambling market is online/on-course gambling, which grew by 22 per cent in 2011 and by 91 per cent overall. In the year to 1 January 2012, William
Hill’s net revenue from online and retail shop operations increased by 27 per cent and six per cent respectively and to increase online and foreign earnings, the company joined forces with GVC Hold- ings to table an offer for Sportingbet’s operations in December 2012.
www.sportsmanagementhandbook.com
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