The latest Sportindex report from the Swedish Sports Forum in collaboration with HUI Research reveals a 2.5-percent decline in sales for the Swedish sports retail sector during the second quarter of 2024. This marks the tenth consecutive quarter of negative growth for the industry, underscoring ongoing challenges. The persistent decrease is attributed to cautious consumer spending focused on essential purchases, compounded by profitability challenges and store closures.
Q2 opened and closed on a downturn for the sports retail market. Sales plummeted by 4.7 percent in April, followed by a modest 0.1 percent growth in May. June concluded the quarter with a 2.8 percent decline in sales. Across the entire store network, sales fell by 3.4 percent. However, comparable store sales (identical stores across both periods) only saw a 0.8 percent decrease, suggesting that store closures significantly impacted overall performance.
Interestingly, e-commerce provided a silver lining, with online sales increasing by 2.8 percent during the same period. This growth indicates a shift in consumer buying habits towards online shopping, even as physical store sales struggled.
Industry insights
Pontus Petersson, CEO of Intersport Sweden, highlighted the cautious consumer behavior towards big-ticket items, strongly focusing on essential purchases. “The sports sector is particularly affected, with ten quarters of declining sales. This, along with digitalization and rising costs, hampers profitability and complicates business operations, leading to a long-term trend of store closures. Maintaining customer value and efficiency is crucial for staying relevant and profitable. Stores that endure this economic cycle will emerge stronger when the trend reverses,” Petersson noted.
“The quarter was challenging, marked by uneven sales as consumers had less disposable income and prioritized essential purchases. As we look ahead to Q3, our focus remains on customer engagement and ensuring efficient operations in our stores and digital channels,” Daniel Löfkvist, COO and Vice President of Stadium Group, echoed similar sentiments.
The bike sales surge
Despite the overall decline, the bike category emerged as a significant positive outlier. Spring and early summer are crucial for bike sales, and this year, the category accounted for 45 percent of total equipment sales in the second quarter. Initially, bike sales started weakly, but as the winter chill subsided in May, sales surged, showing double-digit growth in both May and June. Overall, bike sales grew by an impressive 9.6 percent during the quarter.
“The bike category had a robust quarter, particularly in May and June, with double-digit growth,” commented Lars Palmgren, CEO of SGN Sport Sweden (Team Sportia, Sportringen and Bike Nation). “Various factors influence bike sales, including the timing of local benefit transactions. It’s essential to view the trends over a longer period. Thanks to strong figures in May and June, Sportindex now shows a positive trend for bike sales this year, which is encouraging given the category’s struggles during the economic downturn.”
Palmgren expressed optimism for the bike segment’s future, noting that many companies are ready to offer their employees benefit bikes. Additionally, there is still a high demand for bikes in stores, reflecting a pent-up need after years of restraint. Biking is also seen as a healthy and sustainable mode of transport, which bodes well for continued growth in 2024 and 2025.
Q2 in summary
The Swedish sports retail sector faces significant challenges, with a continued decline in sales and shifting consumer preferences towards online shopping. However, categories like bikes offer a beacon of hope, showing potential for growth amid the broader downturn. Industry leaders emphasize the importance of customer value and operational efficiency to navigate these challenging times and emerge stronger in the future.
The Swedish Sportindex is published quarterly and includes detailed statistics on physical store and e-commerce developments. It breaks down sales into clothing, shoes, equipment, and 23 relevant product categories.
