After considerable sales increases in 2020 and 2021, followed by a slight downturn in ’22, golf industry watchers have been waiting to see where the business would go this year. Is the business of golf continuing to trend upward? Peaking? Dropping off? Interest in the sport has never been higher, but is that translating to success at the cash register?
By any measure the golf business is in a good place as 2023 comes to a close. That isn’t to suggest that there aren’t issues that need to be addressed to keep it on a positive trajectory, but thus far the game and the business are thriving financially as never before.
Key metrics for success
Golf Datatech provides the industry with multiple datapoints to track the state of the business. Here’s a look at some of the insights supplied monthly by Golf Datatech to key industry stakeholders:
Rounds played: Golf Datatech compiles and distributes the golf industry’s most important macro measurement, monthly rounds played, with support from the National Golf Foundation, individual golf courses and many of the leading golf course management groups.
Retail sales of golf equipment: We use point-of-sale data from close to 1,000 data providers to project consumer demand for golf equipment through green-grass and off-course specialty stores, measuring consumer purchases of balls, clubs, bags, shoes, gloves and distance devices.
Retail sales of golf apparel: Measuring sales through the same channels as equipment, we project consumer demand for both men’s and women’s apparel down to the level of shirts, tops, bottoms and outerwear.
E-commerce sales: We all know that ecomm sales of both equipment and apparel spiked during the early days of COVID as traditional brick-and-mortar stores shut their doors, but how have online sales of equipment fared since? We provide monthly insights of retail sales as well as twice a year looking into online consumer purchasing behavior.
Inventory levels: While consumer interest and demand are critical metrics needed to manage a golf business, Golf Datatech also provides insights into trade inventory levels in the key product categories we cover. This is a particularly important metric to keep an eye on when so many product categories suffered through substantial supply chain disruptions as COVID wreaked havoc in so many plants and damaged shipping channels.
With those as the primary metrics to measure how 2023 fared, here are our opinions on how the results grade out:
Rounds played: Grade: A.
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If rounds played are the engine that makes the rest of the business run, the U.S. golf industry remains on solid ground. 2023 featured better golf weather than ’22, and demand for tee times and club memberships remained strong. We project rounds played will end the year up 2 percent to 3 percent, and when compared to pre-pandemic 2019, rounds will be up about 15 percent.
Additionally, many golf operations report enjoying higher green fees or monthly dues, as well as substantially higher initiation fees for private clubs, all of which have improved the financial condition of the golf courses themselves. Frequently, the cash positions of these operations have allowed for increased capital expenditures to improve the course, the clubhouse or the overall experience, all of which adds to the positive momentum for golf in total.
Retail sales golf equipment: Grade: B
Golf equipment sales were a mixed bag in 2023. Consumables (balls and gloves) performed exceptionally well as supply chain problems from ’21 and ’22 were left in the rearview mirror. In golf clubs, unit volumes were lower across the board while dollars held close to level as average selling prices continued to rise. For those interested in how equipment has fared versus pre-pandemic levels, be assured sales remain highly elevated, up 39 percent compared to 2019.
Golf Datatech consumer research of the serious golfer suggests that the foundation of equipment sales, the avid player, continued to play often and buy consumables frequently throughout the pandemic, however, their purchase cadence in clubs has been slowing. New players, or those who recently returned to the game, helped grow the sport to new heights in the early days of the pandemic but were not as active in ’23 and likely negatively impacted overall sales levels.
Retail sales golf apparel: Grade B+
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Golf apparel started 2023 like an Arnold Palmer back-nine charge, rebounding from pandemic-induced supply and demand issues. However, the second half of the year turned into something akin to a par-fest with sales running level to down slightly. When all is said and done, total apparel sales will finish 2023 about 3 percent ahead of prior year.
Green-grass golf shops fared better than the off-course this year, following a 7-percent uptick in ’22 with another 5-percent gain in ’23. Given that pro shops represent the majority of golf apparel sales, it stimulated the entire segment.
E-commerce sales: Grade B
After exploding in 2020 and ’21 because of COVID-induced brick-and-mortar closings, e-commerce sales took a significant leg downward in ’22, and most of the previous two years’ gains fell by the wayside. Ecomm sales of virtually every equipment category suffered in 2022, with only one online sub channel continuing to hold its own or improve, that being direct to consumer. In 2023, e-commerce sales in most major equipment categories expanded, led by golf balls. However, the massive gains of the first half were tempered in the back of the year, and total sales will finish the year about on par with ’22.
Apparel e-commerce did not fare as well as equipment, and online sales of golf clothing have been down for more than 20 consecutive months, with many months falling 20 percent or more, with no immediate end in sight.
Trade inventory levels: Grade B-
Trade inventories in late ’23 are running toward the high end of what would be considered “normal” based on historical levels. Given that sales are running 30 percent to 40 percent above 2019 levels, more stock is not unexpected. However, many retailers have grown used to significantly lower levels of inventories and returning to “normal” seems heavy.
Some products, such as irons, are lower because the business of selling irons has changed from the days pre-COVID, with far more sets now sold through custom fitting, meaning the trade is carrying a lot less inventory in stock sets.
Other equipment categories struggled to get enough product in 2020-21, then just as supply chains were catching up in 2022-23, sales gains slowed, leaving a lot of product in backrooms and in retailers’ warehouses. Currently, some of the smaller categories (putter, glove and shoe) have too much inventory, as are woods, while other categories appear to be under control for the moment.
Golf apparel inventories are running high in several of the smaller categories, as well, specifically women’s merchandise, which also has had a significant slowdown in velocity in ’23.
Considering all the upheaval suffered by retailers and manufacturers over the past four years, with demand whipsawing up and down rapidly and supply chains being overtaxed, inventory levels are not too bad overall.
Total golf industry: B+
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It’s been a remarkable 3½ years. The golf business went from a total bust in the first few months of shutdowns and lockdowns to remarkable growth, all the while enduring crushing supply chain issues. As everyone anticipated, demand eventually peaked and the supply chains reopened, letting product flood in and inventories began to build, but so far it has not been enough to be a serious problem across the majority of categories.
With a lot of new golfers, along with a solid foundation of avid players, rounds played are solid and sales remain elevated just below all-time high levels.
While no one has a crystal ball and can predict where the business of golf will be in 2024 and beyond, the foundation remains strong and resilient.
Guest contributor John Krzynowek is a co-founder and partner at Golf Datatech LLC, the leading independent market research firm in golf.