As we mentioned before, the weather is having a stronger impact on the European sporting goods market than the economy. Just as the snow is falling copiously outside our office window near Paris, retailers in the alpine ski resorts are telling us about record sales of all kinds of winter sporting goods in their stores, including clothing and hardware, and even higher increases for equipment rentals.
The snow situation has been excellent for the year-end holidays on both the northern and southern sides of the Alps and in the Balkans. Good snow conditions have been reported in the Nordic countries except in the cities of Oslo and Helsinki, where the snow has melted away. There has been more snow than a year ago in Spain, although the local retailers expect only a little improvement because the economic crisis has led many skiers to keep their old equipment.
The North American market has performed well. Russia has been a problem so far because of the economy and because there has been hardly any snow in Moscow and St. Petersburg. In Switzerland, some jewelers have reportedly complained about softer market conditions, but the winter sports season has been better so far than at the end of 2007 for all kinds of products. With the snow reaching as far down as Bern, which has an altitude of only 680 meters, people have gone back to cross-country skiing and snowshoeing.
Interestingly, while the Spanish golf resorts have reported big declines in sales to British tourists, partly because of the drop in the pound sterling, vacationers in France and other parts of Europe did not wait for the snow to book their ski holidays, in spite of the crisis and of concern about climate change. While they fear a drop in the number of Russian skiers, hotel keepers and retailers in alpine resorts have fared better than a year ago so far this season.
It’s as if many Europeans have wanted to forget about the economy and have fun before facing the harsh realities of everyday life. Still, the pre-Christmas selling season was not brilliant. We’ll have a better picture for the season after the year-end sales and the next weeks of snow. For the moment, retailers’ inventories of winter sporting goods are said to be still high enough to cope with the increased demand without resorting to increased reorders.
According to the NPD Group, the European sports market will be less impacted by the recession than other items of consumption. People will give up on a new car or on a flat screen but not on a nice T-shirt or a new pair of sneakers. Furthermore, half of the sports shoes sold are bought for youngsters up to the age of 24, who are not particularly concerned by the economy.
NPD has predicted that in 2008 sales of sports shoes and apparel would decline in the five major European markets by 5 and 8 percent in value, respectively, faring worse than in the U.S. market, where average selling prices have continued to grow. European NPD officials feel that prices of sports shoes and apparel will stop declining if they continue to go down in volume. They think that specialist retailers, single-brand stores and internet sales will continue to win market shares in Europe.
