The European sports retail market

• The European sporting goods market 2019 - 2022
• The three big category trends
• Europe, a key market for bicycle retailers
• Pure players continue to grow
• The outlook for sporting goods retailers
  
• All the numbers from the European sporting goods market 2022 at a glance
• Methodology

European sporting goods market grows 4 percent in 2022 

Our annual study of the sports retail market in Western Europe reveals that most of the 70 leading sports retailers operating in 15 European countries continued to grow in 2022.  

Based on our estimates, the market grew by 4.0 percent to a total of around €61.5 billion in 2022. The retailers we interviewed gave indications that despite the challenging market environment in 2023, they still expect a low single-digit growth rate for this year. 

Tracking over the last four years, the Western European sporting goods market grew with a 3.5 percent CAGR between 2019 and 2022.

How does this compare with the global trend in sporting goods? Circana (formerly  NPD Group) calculated that the global sporting goods market also grew 4 percent in 2022 to an estimated level of $569 billion. Broken down into categories, Footwear increased by 7 percent, Apparel by 2 percent, Equipment by 2 percent and Bicycles & Accessories by 4 percent.

Sport-style Apparel, Outdoor and Sustainability are all trending 

Steve Evers, CEO of Intersport International Corporation (IIC), which announced record sales of 13.7 billion euros in 2022, saw slower growth in Nordic regions last year, with “the relevant and big growth [coming] from the central regions, stretching from Ireland to Ukraine and covering 18 markets.” 

This larger-than-average growth was reflected across all categories, but Soccer and Training represented a big part of IOC’s (double-digit) growth in 2022. Apparel achieved the most growth, Footwear was slightly below average but still achieved good growth, and Hard Goods were in between. 

The only category that was behind the others was Running “because,” explained Evers, “people had already invested massively in running apparel during the lockdowns and a certain market saturation had been reached.” 

In addition to the growth in “Sports-style” Apparel, the Outdoor category again developed strongly in 2022, driven by rising consumer demand and an increase in outdoor activity.

The European Outdoor Group (EOG) reported an 11.5 percent increase in the European outdoor market in 2022. The wholesale value of all product categories covered by the EOG’s State of Trade report totaled €6.1 billion in 2022. Outdoor Apparel represented €2.8 billion in value, and Outdoor Footwear, which recorded the strongest growth up 20.4 percent, represented €1.6 billion. 

Although not a category per se, sustainability was (and continues to be) a trend affecting consumer preferences and, therefore, retail sales in 2022. Our author Fredrik Ekström, Brand Consultant and Business Advisor, shared with us his findings on the importance of sustainability to Gen Z. 8 out of 10 Gen Z consumers (those born between 1997–2012) see sustainability as an integrated part of their personal identity and identify themselves as individuals who incorporate sustainability values into their self-perception. 

In our collaboration with McKinsey & Company, which includes a webinar series, “Becoming a super winner in sports,” the market experts shared data gathered from recent years which show that sustainability is becoming an important buying factor. To continue to be a competitive business, companies will need to integrate ESG as a core pillar into their product and marketing strategy.

And there is starting to be real business potential in this approach:

• 15 to 30 percent price premium for climate-friendly, net-zero products and services across B2C and B2B sectors is possible;
• Sustainability-marketed products grew 2.7 times faster than conventionally-marketed ones;
• Sustainability-marketed products delivered 32 percent of CPG market growth despite representing only 17 percent of the market. 

Europe remains an important market for bicycle retailers 

Despite the slowdown of bicycle sales in 2022, the European bicycle market remained the most valuable market globally, according to Manuel Marsilio, Managing Director of the Confederation of the European Bicycle Industry (Conebi). The market value was €21.2 billion in 2022 (versus €19.7bn in 2021). 

“The overall trend of the industry and the market is positive,” said Marsilo at the start of Eurobike 2023 in June this year. “E-bike sales [in 2022] increased by almost nine percent and production by 19 percent compared to 2021. Sales of bicycles and e-bikes grew by more than seven percent, investments increased by more than 14 percent, and direct and indirect jobs reached a record level of 190,000.” 

Looking forward to 2023 and beyond, the bicycle industry situation has changed since the high demand (and difficult supply) that was the pandemic years, including 2022. The situation is now more subdued due to changeable weather this year, inflation and increased energy costs. But consumers are benefiting from a broad selection in the retail sector in a highly competitive market environment. This has been termed a “correction phase.” 

Pure players winning greater market share 

Since before the Covid years, pure-player e-commerce specialists like German e-tailers Bergzeit and Bergfreunde have been gaining ground over their multichannel competition.

The big news for Bergfreunde at the end of 2023 was its forthcoming acquisition by French sporting goods manufacturer and retailer Decathlon from the US outdoor retailer Backcountry. The purchase agreement was signed on Nov. 24, 2023. The transaction is still pending and is expected to be completed in the coming weeks. Bergfreunde will become a wholly-owned subsidiary of Decathlon but remain a separate legal entity. 

The outlook for sporting goods retailers

The overall outlook for the Western European sporting goods market remains positive despite a challenging market environment (high inventories, margin pressure, consumer concern and shifting habits due to the continued cost of living crisis etc.). 

Victor Duran, Associate Partner at McKinsey & Company confirms this: “The outlook for the market is relatively positive, with expected growth of 3–5 percent p.a. However, competition among retailers is becoming more [intense].”

Of the importance of e-commerce in the future, Duran adds: “In addition, we expect most or all of the growth to come from online channels, with physical retail remaining relatively flat. Therefore, winning retailers will need to have a clear and superior value proposition across both physical and online retail. While certain online pure players will succeed, the cost of customer acquisition is rising, and this impacts pure players especially hard – we only need to look at the situation with Signa Sports United to see the impact of this.”

Speaking on the release of its FY24 half-year results in Sept. 2023, JD Sports Chief Executive Officer Régis Schultz said: “We have delivered a strong first half to our financial period with organic sales growth of 12 percent and profit on track for the full year.” 

Reflecting the trends SGI Europe observed in 2022, Schultz added: “In line with our strategic plan, growth is being driven by our premium Sports Fashion business with an impressive performance in Europe (+27%) and North America (+15%), supported by a strong performance in our more mature UK market (+8%).”

Frasers Group – owners of Sports Direct, Evans Cycles, and Karrimor, among other brands – is maintaining its ambition to become the top sports retailer across the EMEA. It reported a 12.6 percent increase in adjusted profit before tax to £303.8 million (€354.6m) in H1/FY24 and said sales momentum in the early weeks of H2 was being driven by its Sports Direct business. 

Speaking on a LinkedIn post, Michael Murray, CEO of Fraser Group, said: “We have delivered a strong performance in the first half of the year, with great momentum as we head into the Christmas trading period. The elevation strategy continues to drive strong trading performance across the business with good growth in Sports Direct supported by our brand partners. Premium Lifestyle remains resilient despite the economic backdrop, and we continue to invest with confidence in our unique proposition.” 

Murray continues: “As we look to 2024, we are confident that our diversified proposition will continue to provide consumers with choice across a range of price points and brands.”

Sport 2000 International released an update of its One Sport 2000 strategy and progress in November as it looked ahead to 2024 and beyond. Margit Gosau, CEO of Sport 2000 International and Sport 2000 GmbH, revealed details of a three-pronged approach for the retailer, which includes expanding specialization and progressively implementing this in brick-and-mortar retail formats, the establishment of an international retail team, and establishing a stronger brand identity with the new “I am Home” campaign. 

“[In 2022], we took important steps towards our strategy of becoming One Sport 2000,” says Gosau. “In the future, we will focus even stronger on optimizing our international collaboration, expanding specialization and progressively implementing our retail formats.” 

Of its rollout of multi-category format and specialized retail concepts, Gosau states: “We are observing that more and more sports brands are re-assessing their direct-to-customer strategies […] In the midst of the transformation that is taking place worldwide, brick-and-mortar expert retailers are gaining in importance once again.” For Sport 2000, these include concepts for individual sports sectors, such as Absolute Run, Teamsport or ski experts.

The European sporting goods market 2022 at a glance (15 countries)