With sales of £250 million annually, and 57 per cent of overall sales within the big five countries (France, Germany, Great Britain, Italy and Spain), Great Britain remains comfortably the biggest market for replica football shirts in Europe, according to NPD consumer data.
In 2014, for example, Great Britain’s market size was more than twice that of Germany’s and, thanks to the continued spectacle of the Premier League, this trend looks set to continue. However, despite these impressive figures, in recent years increasingly aggressive sales tactics, predominantly by our multiple sports retailers, have led many independents to question whether, despite its size, the replica market is worth addressing.
Indeed these aggressive tactics have resulted in extensive retail price point erosion with the average replica shirt in Great Britain now costing £30, compared to £43 in Germany, according to NPD consumer data, and thus potential margin erosion as well.
Its not difficult to trace the beginning of this price point decline.
Just over ten years ago The Office of Fair Trading ( OFT) fined 10 businesses a total of £18.6 million for fixing the price of Umbro replica football kits. High street chain JJB Sports received the biggest fine, almost £8.4 million, followed by kit manufacturer Umbro (£6.6 million). The then Premiership champions Manchester United were fined more than £1.6 million and the Football Association £158,000.
The OFT investigation found that at the time most retailers were charging just under £40 for an adult shortsleeved England shirt and just under £30 for juniors.
John Vickers, chairman of the OFT, said: “The fines imposed reflect the seriousness of the price fixing in this case. Since we launched our investigation the prices of replica football shirts have fallen and consumers can now shop around and get a better price”.
With such a high profile case, and such large fines, there is an argument that suggests both UK retailers and manufacturers alike have been much more aware of the price points on these particular lines since that time and, as such, have continued to remain price aggressive on replicas. Interestingly it was Sports Direct’s Mike Ashley who had been the original whistleblower in 2000, handing the Office of Fair Trading evidence of business meetings held by sports retailers to fix the price of football shirts, and it is Sports Direct that has ultimately benefitted.
With the decline of multiple retailers such as JJB and allsports, Sports Direct have become the UK’s largest seller of replica shirts and have used both buying power and the basis behind this case to lower prices to the benefit of the end consumer.
But where does that leave the independent?
Without the leverage and buying power many independents are unable to purchase with aggressive enough margins to make it worthwhile to retail replicas.
Once we add in other channels, such as grocery, also joining the replica retail picture, then the sales and margin opportunities become even smaller.
However, some independent retailers are beginning to find alternative solutions for replica retail. During major football Championships some retailers will take a small quantity of national shirts as much for “window dressing” and to appear relevant as opposed to necessarily shifting any meaningful volumes.
To further offer a point of difference a number of dealers also consider looking at “niche” national shirts - a strategy that is particularly effective in Scotland where, according to Steven Dow, MD of Football Nation in Edinburgh, ‘If Scotland do not qualify we usually see an increase in interest particularly in shirts of nations that are playing in England’s group- there are definitely customers out there who want to wear something different- and in this case anything but England!”
But does this same approach work at local club level?
When Kitbag.com launched at the end of the 1990’s their raison d’etre was to stock every replica shirt across the entire football league and beyond. However, it soon became apparent that the volume drivers came for a small number of club replicas and, over time, the replica range reduced accordingly to showcase, predominantly, Premier League and Champions League teams.
At the same time many clubs became more proficient with their own retail operations – improving their eCommerce operations, connecting better with their own fan databases and further taking sales from both Kitbag and local independents.
So do any opportunities still exist?
Neil Keeling of NK Sports in Weston-super-Mare has begun to focus his attentions on serving lower league teams and looking at driving replica sales by helping those clubs to be more commercial.
He cites his greatest success story as Weston-super-Mare FC: “When we were first involved the club was lucky to sell 15-20 replica shirts. We have now put an online club shop in place, communicated with the club database around shirt launches etc and now expect to sell over 120 replicas per year.”
Similarly Peter Carpenter of Teamsport, Galway, has begun to work with his local club - Galway Utd – creating an online club shop, managing the club shop at the ground and driving replica sales in partnership.
“This allows me to maintain exclusivity on the replicas as well as working directly with the club to enhance sales for mutual benefit” commented Peter.
So does this mean that there is still hope for the indpendent when it comes to replica retail?
Much like many other areas of the sporting goods industry it is evident that the opportunity within the replica market is to find that point of difference – whether it be working exclusively with a local club, finding those niche replica shirts/obscure nations/clubs that are not widely or deeply stocked or simply using them as a targeted way to bring in customers to purchase other items.
By looking at these alternative approaches margins can be maintained and competition reduced. So….perhaps there is still hope.