Just as the FIFA World Cup got underway last week, the Intersport Group made a forecast that its retail sales of football products will grow by at least 30 percent to a level of more than €700 million in 2006, based on the estimated retail sales achieved over the last few months by its affiliated stores all over Europe and on orders placed for the 2nd half of the year.
Sales of football boots have been rising dramatically since April, and with projected sales of over five million pairs of football boots by the affiliated stores in the course of this year, Intersport is coming out as a clear leader with a European market share of about 25 percent. The retail group seems to be gaining market share in football, as no other major retailer has so far indicated such a strong growth rate.
The 30 percent growth rate projected by Intersport for 2006 is interesting, as the group had achieved sales increases of only 15-20 percent during the previous World Cup and during the Euro 2000 and Euro 2004 championships. Franz Julen, chief executive of Intersport International Corp., says the football market is benefiting this time more than before from the strong competition between Adidas and Nike in the football pitch, which has led to the launch of innovative products and to high marketing investments. Intersport’s main partner this year is Adidas, but the retail group is also working closely with Nike and Puma. Intersport has been getting numerous product exclusives and considerable marketing support from these brands for its own initiatives in this product segment. The concentration on these three key brands has resulted in excellent sell-outs for all three partners.
There is no doubt that football has become more popular and more global than ever, even though a recent survey showed that more than half of the American population doesn’t know where this year’s football World Cup will be played. Major football icons of various nationalities are supporting the image of the game. Because of its European focus, Intersport is taking advantage of the fact that the World Cup is being played in Germany this year, and that all the major nations are taking part in the tournament including Holland, which was left out last time.
Precise sell-out figures are not yet available for Intersport affiliates in France or the Netherlands, but they are certain to have recorded strong double-digit increase in their sales of football products so far this year. In Italy and the UK the growth rate has been between 10 and 20 percent, but Intersport’s score in the UK has been definitely been influenced by the price-cutting strategies of Sports Soccer/Sportsworld, which have also affected no doubt the likes of JJB Sports and The John David Group. Intersport members in Spain and Switzerland have instead enjoyed sales increases of about 30 percent for football products.
The biggest increase has obviously taken place in Germany, where the World Cup kicked off last Friday with a good score for Germany and most of the other European teams. Intersport Deutschland, which represents nearly one-third of Intersport’s global turnover, has experienced a 43 percent sales increase in retail sales of football products since the selling season began last November, and the cooperative is projecting a sales increase of 30 percent until next November.
As the major German football brand, Adidas saw its sales grow twice as fast in the German Intersport stores, showing a sales increase of 81 percent since last November as compared to the same period a year ago. Their sales of Puma products instead grew by 10 percent, and those of Nike by 7 percent, according to Klaus Jost, chief executive of Intersport Deutschland and vice chairman of Intersport International. Intersport’s private team sports brand, Pro Touch, did particularly well in football apparel.
Total retail sales rose by 6 percent at Intersport Deutschland since last November, with increases of 5 percent for ski products (28 percent for cross-country skis and 9 percent for snowboards) and 9 percent for outdoor products. The running category showed an increase of only 2 percent after three years of double-digit growth, as the big brands clearly shifted their focus to football, while inline skates were down by 20 percent. An overall retail sales increase of 2-3 percent across the board is expected for the full calendar year.
While Adidas looks like the brand that will benefit the most from the World Cup in Europe, partly also because it is its official sponsor and licensee, Nike stands a strong chance because of its sponsorship of the Brazilian team. A poll conducted by NPD Sports Tracking Europe among various types of persons in the five major countries shows that 38.4 percent are betting that Brazil will win the tournament. Even in Germany, nearly half of the population gives Brazil the best chances, while less than one-fourth have faith in their domestic team. Brazil also comes first in the polls in Spain, slightly ahead of the Spanish team. It comes second after the national team in the UK, Italy and France.
This year’s World Cup will be watched on TV by more than 1.5 billion people around the globe, leaving less time for shopping. In Europe, a consumer survey conducted by NPD Sports Tracking Europe indicates that nearly half of the working population will find some way to watch it in real time during working hours, either on TV or over the internet. About 17 percent will watch matches on TV, with the highest potential rates recorded in Britain and Italy. More than 10 percent of Italians will use the computer, followed by the Spaniards. Still in Spain, 7.1 percent of respondents confessed that they will plead sick to be able to watch the World Cup at home.
Naturally the World Cup is paying the ransom of its success with a flood of counterfeited products linked to the event. Officials of Adidas, Nike, Puma and the World Federation of the Sporting Goods Industry met with customs officials from Germany and other countries in Brussels just before the tournament to see what could be done in the short and longer term to combat the problem. More than 2,000 seizures of World Cup fakes were carried out in the European Union before the tournament started.
