NSGA cites growing fitness equipment market as a "bright spot"

In a sporting goods market where many categories are struggling to hang onto sales and revenues, the fitness equipment area remains a shining star, according to recent National Sporting Goods Association figures. Those figures show fitness equipment sales hitting $5 billion for 2004 and looking to grow by at least 2 percent this year.

“Exercise is now the biggest category we cover, and certainly one of the bright spots,” NSGA research specialist Tom Doyle told SNEWS®. “The category has gotten so big that big percentage increases are now unlikely.”

For 2005, the NSGA projects sales to reach $5.11 billion, according to its “The Sporting Goods Market in 2005” report. It represents for 2004 about 22 percent of the $22.9 billion athletic and sports equipment market reported — a figure that is expected in 2005 to hit $23.4 billion. Add in clothing and footwear and the market reaches sales valued at about $48.9 billion for 2004, with sales projected to reach $50 billion for 2005.

Breaking down the big picture in exercise equipment, the trend continues that women are dominant purchasers and major users of cardiovascular equipment, while men are the same for strength-training pieces. Plus, treadmills are still the biggest and still growing in dollar sales, but sales of bikes and ellipticals are growing also. And Sears still accounts for about half of all sales, with the exact percentage sliding up or down slightly depending on the category.

Women get aerobic, men pump muscles
Women led purchases of motorized treadmills (62 percent compared to 30 percent of purchases by men), elliptical trainers (60 percent compared to 37 percent by men) and stationary exercise bicycles (52 percent vs. 37 percent by men). In this survey, the purchaser was considered the “major user;” remaining equipment purchases were described as “for household use.”

Men were the dominant purchasers of free weights and weight sets (64 percent vs. 29 percent by women), and they also led women in the purchase of multi-purpose home gyms, although by a smaller margin (47 percent compared to 40 percent by women).

“Women appear to be buying less strength stuff,” Doyle said. “The trend has been negative in home gyms and free weights, but there has been a slightly upward trend in the category ‘hand, wrist, ankle weights.'”

He pointed out that the hand weight category is only surveyed every other year, so there is no immediate comparison. The “weight bench” category is another that is only surveyed every other year; in 2003, men also dominated those purchases (85 percent of purchases compared to 12 percent by women).

Men and women appear equally interested in tracking their fitness regimen, the NSGA report found, with men accounting for 47 percent of heart-rate monitor purchases and women accounting for 45 percent.  

Which equipment is tops
Not surprisingly, treadmills continue to be the piece of exercise equipment with the largest sales volume. In 2004, sales of treadmills reached $2.82 billion, up from $2.75 billion in 2003. Unit sales in 2004 were even with 2003 at 4.4 million units. The average price of a treadmill in 2004 was nearly $635.

“Treadmill sales, almost half the market, are growing more slowly,” Doyle pointed out. “With more than 30 million treadmills sold in the past 10 years, we are running out of places to put them. With that many units sold, the market in used treadmills is growing. For 2004, it is approaching 500,000 units. This is probably having some impact on the rate of new treadmill sales growth.”

Sales of stationary exercise bikes rose to $395.5 million in 2004, compared to $379.4 million the previous year, while unit sales were flat at 1.6 million. The average price of a bike was $247. The biggest growth — with still more room to grow — was in elliptical trainers. Sales rose 18 percent to $216.4 million in 2004 on an increased unit volume of 500,000, up 20 percent from 400,000 the previous year. The average price in the NSGA report was $416.

Doyle said, however, that the average price of ellipticals may skew lower than they are in reality in NSGA’s report.

“I don’t believe we get a true share of high-end ellipticals in our survey,” he said. “Average price for them probably should be higher.”

One category that showed less of a glowing trend was in home gyms and free weights, where sales actually declined in 2004. Sales of multi-purpose home gyms slipped to $696.2 million from $749.5 million in 2003, a drop of 7 percent, and sales of free weights/weight sets were $287.2 million from $303.1 million the previous year, showing a 5.2 percent decline.

Doyle wasn’t sure what the issue was in the category although he did say that one year wasn’t a trend and that he would recommend companies not focus on that figure yet.

Where the equipment is purchased
For treadmills, department stores, which means primarily Sears, accounted for 49.4 percent of all dollar sales of treadmills and 54.7 percent of unit sales of treadmills, followed by sporting goods stores (16 percent of dollars — about a third of that sold at Sears — and 16.6 percent of units) and specialty fitness stores (12.5 percent of dollars — about a quarter of that sold at Sears — and 6.2 percent of units).

The NSGA didn’t start tracking specialty fitness until 2002, Doyle said. For that year, 11 percent of all treadmill sales occurred at specialty, compared to 63 percent at department stores (mostly Sears). That means that sales at specialty have eked up slightly, while sales at department stores have dropped by just over 13 percent.

“The fitness equipment market is not big — it’s huge,” Doyle added. “I expect continued growth, especially at the high end. I have only one caveat: An economic downturn would probably affect this. But who is good at predicting that?”
 
For more information about the NSGA report, “The Sporting Goods Market in 2005,” contact Doyle, 847-296-6742, ext. 107, or email info@nsga.org.
 
SNEWS® View: Even considering that the study tends to skew lower in prices, it’s obvious the industry has not yet reached a peak like others such as hockey, racquetball or football. And that’s good news to the fitness manufacturers and retailers. Two percent growth isn’t anything to shake a stick at, and of course, other groups forecast more than that. Now that the all-comers phase in the industry is over where anybody with a piece of iron or a moving belt could sell a product, what will sell is slicker marketing, better product and design innovation. Any ol’ moving belt ain’t good enough anymore. Backing that up perhaps are dropping sales at department stores (speak: Sears). The fitness equipment consumer seems to be seeking something else — either higher-end equipment or a higher level of customer service, both of which are more available at specialty. That could bode well for specialty fitness, assuming it can continue to grow to meet the task of highly honed sales skills and service demanded by today’s consumer. That doesn’t, of course, count out Sears, but it means the department store will need to offer more and better to keep its share from sliding.