The sporting goods industry continues to be affected by the coronavirus crisis, particularly at the manufacturing end of the supply chain, judging from the August edition of the Covid-19 Impact Survey conducted by the World Federation of the Sporting Goods Industry (WFSGI).
Manufacturers reported decreases in demand of 13 percent from Europe and 20 percent from North America as compared to the month of July. Only 25 percent of them were not facing a drop in orders in August, the same rate as in the previous month.
Also, double as many respondents mentioned shortages of raw materials, in spite of better conditions for deliveries, and 12 percent more manufacturers than in July said they were confronted with labor shortages, partly due to closed public transportation.
In contrast with other regions, an increasing number of manufacturers in the Far East, South Asia, Africa and the Middle East are reporting a disruption in the supply chain. The number of infected employees has more than doubled, and 12 percent of the staff has not been reporting to work in order to take care of infected family members.
On the other hand, only 65 percent of the respondents to the survey said they see their business impacted by the coronavirus, compared with 87.5 percent in July. It was the lowest level registered in the monthly survey since April. The most affected regions are Europe and North America, where about 50 percent of the respondents expect less business going forward. About 30 percent of all the respondents predict a drop of 20 percent, while 12.5 percent see it going down by 50 percent. On the other hand, only 10 percent expect a full recovery, or half as many as in July.
In response to this situation, “consolidating the supply chain” has lost more than 10 percent of its importance for the manufacturers’ clients. Nearly 20 percent more respondents among the brands and retailers opted in August for keeping the same suppliers as before, while lowering the volume of their business with them.
Close to 90 percent of the brands and retailers are demanding flexibility in their relations with suppliers. Efficiency and stability have become more important for them. They want a lean and adaptive supply chain. A growing number of clients are considering regional-centric sourcing solutions, but 37 percent of them don’t want to reframe their sourcing priorities.
For 87 percent of the brands and retailers, online sales are the favorite option to mitigate the impact of the pandemic, and it has been gaining ground in recent months. More and more of them – nearly 50 percent – say they want to be closer to the market.
Cleaning out inventories has been a priority for 46.3 percent of the respondents in August, almost double as many as in July. Brands and retailers also giving more importance to product marketing.
Like before, outdoor sports, running, cycling and walking are seen as the winners of the pandemic, being chosen by more than 60 percent of the respondents to the August survey.
WFSGI is again inviting all companies in the industry to participate in the September edition of its “pulse survey.”