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Nov 17, 2014

The NPD Group examines the growth of the outdoor market

The outdoor footwear and apparel market was worth £460 million and represented the fourth largest category in the sports sector for the 12 months to June 2014, according to NPD’s online consumer panel.

It grew 14 per cent compared to the same period in 2009 and outperformed the market as a whole, which increased sales by seven per cent during this time. Double digit growth has been accompanied by important changes to the sector over the past five years, both on the consumer and retail side.

Recession

After the recession hit in 2009, people changed the way they planned their holidays. As incomes began to be squeezed and the pound became weaker, people opted for domestic trips rather than overseas destinations.

Domestic holiday tourism grew by 12 per cent from 75 million trips within the UK in 2008 to 84 million in 2009, according to the Office for National Statistics. The rise in popularity of the staycation boosted attendances at outdoor music festivals, contributed to the development of outdoor pursuit activities and, consequently, led to higher sales of outdoor footwear and apparel.

On the retail side, the past five years has been marked by the financial difficulties of outdoor market leader Blacks, until its rescue by JD Sports in January 2012. Although the group lost around 15 market share points during the past five years, according to NPD’s online consumer panel, it still remains the leader in the sector. Furthermore, the JD Group is optimistic it can turn the business around and it will be interesting to see how Blacks’ and Millets’ market share evolves during the coming months.

Retailers such as Cotswold Outdoor, Mountain Warehouse and Go Outdoors have gained substantial market shares - combined, they’ve climbed from six per cent to 18 per cent during the past five years.

Ranked in 17th position for outdoor apparel in 2009, Mountain Warehouse is now the fifth biggest retailer - a symbol of the growing competition in the market. The company sold one million waterproof jackets in the UK during the 12 months prior to the end of last May, which helped it post record financial results.

During the wettest winter in the UK for generations, Mountain Warehouse was able to capitalise on increased demand for outdoor apparel by adapting quickly to market conditions, which is critical for retail growth in the outdoor sector.

Consolidation
The market has also experienced a period of consolidation driven by rival retailers Sports Direct and JD Sports. Since its purchase of Field & Trek in 2007, Sports Direct has bought Gelert and taken control of Yeomans. At the same time, JD’s retail portfolio has continued to expand with the acquisition of Oswald Bailey and Tiso. It’s also opened a new trial concept store called Ultimate Outdoors, which showcases the company’s outdoor offering.

Despite these acquisitions, the market remains fragmented, with the continued presence of many independent stores.

This fragmentation is also present when looking at outdoor brands. No brand has more than a 10 per cent share of the outdoor footwear market, while in outdoor apparel, in 2009 one brand stood out from the competition, but has since lost substantial share points and now retains just over 10 per cent of market share.

Online
Another significant change in the market is the growing amount of outdoor goods being purchased via the internet.

Online sales have tripled in the past five years. Looking at internet sales only, the outdoor category is ranked as the third largest category in the sports market. This strong performance has been driven by Sports Direct’s increasing online sales and the development of multi-channel offerings by the specialist outdoor retailers.

The NPD Group monitors the sales of sports footwear and apparel in many countries around the world. For more information call the NPD Group sports team on 01932 355580 or visit www.npdgroup.co.uk.
 

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