XXL was not the only poor performer in Norway in the first quarter of 2019. As we already reported, its sales in its home market fell by 5.9 percent in the quarter, with a drop of 10.3 percent on a comparable basis (SGI Europe Vol. 30 N° 15-16 of April 27). Altogether, however, the major Norwegian sporting goods chains failed to beat last year's outstanding winter sales results during the period, suffering a bigger-than-expected decline of 8.6 percent, according to the Norwegian Sporting Goods Association.
The first quarter of 2018 had showed a sales increase of almost 11 percent as compared to the previous year for the major retail chains, which account for about 74 percent of the market. The figures reported by the chains for the first three months of this year show that they had revenues of 2,992 billion Norwegian kroner (€305.7bn-$343.5bn), down from NOK 3,274 billion in the same quarter of 2018.
In terms of products, interest in skiing continues to be strong in Norway. The association estimates that about 320,000 pairs of cross-country skis were sold during the past winter, a decrease of 20 percent as compared to the previous season. Sales of alpine skis stayed fairly stable year-to-year with roughly 100,000 pairs, but sales of wool clothing, ski jackets and ski pants were also down.
The weather played a role, but it was not the only factor. The Easter holidays took place in the first quarter of 2018 and during the second quarter in 2019. Consumers in Norway also faced high electricity bills and uncertain interest rates in the latest quarter, which may have also played a role in the sales decline.
No more growth in offline sales is predicted in Sweden. Online sales of sports and leisure products grew by 12 percent in Sweden during the first quarter of 2019, while total e-commerce market went up by 15 percent, according to a so-called “e-barometer” report recently released by HUI Research in collaboration with Postnord. The data is based on four major surveys conducted between February and April where approximately 7,500 customers were questioned.
HUI suggested that the weather played a role in the below-average results for the sports segment, as Sweden experienced less snow and poorer overall conditions for winter sports than last year. Another factor was that online sales figures had been particularly strong during the same period in 2018.
The e-barometer report also revealed that 10 percent had made purchases of sports and leisure purchases from foreign websites. The average value for each purchase during the quarter was 1,232 kronor (€116-$130) on Swedish websites and SEK 1,239 (€117-$131) on foreign ones. When making foreign purchases, 28 percent of Swedes preferred to buy from Germany, 27 percent from the U.K. and 18 percent from China.
When asked why they bought products outside Sweden, 64 percent said it was because of lower prices, while 47 percent said that the products were not available on Swedish sites and 32 percent said that the offering abroad is larger.
In the report, HUI predicts that the Swedish sporting goods industry is approaching an inflection point, where all growth will take place online. HUI also believes that the industry can soon face a period when several major players will be knocked out due to a price war, and that the winners will probably be the online-retailers who invest in house brands and who can provide better and faster service to consumers.
