In last month’s issue, Tom Stine provided an overview on how the USA market is faring during the global pandemic. This month Phil Barnard, a partner with Golf Datatech, does similarly with a UK overview.
After obtaining his Mechanical Engineering degree from Imperial College London, Phil identified the need for value-based management systems and support within the golf industry. He set up Crossover Technologies, which would become a leading EPOS provider in the Golf across Europe and Australia. Phil formed a European JV with Golf Datatech in 2006 and went on to become a full Partner in 2018, now managing the global audit team.
How would you assess the golf season that the UK just went through in 2020?
Chaotic. The season started normally and in line with the last 3 years. As the pandemic started to take hold things slowed and eventually ground to a complete halt during the initial 8-week lockdown. Golf was one of the first activities to be allowed, as it fitted with the social distancing requirements.
Golfers were initially allowed out as 2 balls in May and then normal play was resumed in June. From that point on, the rounds played have been at record levels. July and August were up over 50% on the previous year. By the end of September the year-to-date number was 7% up.
Is the surge in golf related purchases simply tied to the pandemic or is there real evidence showing a more lasting uptick?
Retail has been changed by the pandemic. Overall sales haven’t recovered to 2019 levels yet. At the end of September we were still 18% down overall. During lockdown there was a strong swing to online and a move away from the traditional golf channels in some categories. Since the easing of restrictions things have returned to some extent and overall sales have hit record figures. July and August were the two biggest months ever recorded by Golf Datatech in the UK. September was the fifth largest.
Much of this spend was pent up demand, but there has been a significant shift in market mix. Clubs have significantly outperformed apparel and accounted for nearly 48% of spend. Other categories like trolleys and bags have also flourished. Many of these items will be popular with new and returning golfers. However, I think it’s too early to say how much new money has come in to the market.
Are there clear embedded “red flags” in the UK’s golf economy that concern you?
Generally, the retail side of things is in good health. Stock levels are low and sales have returned in for most retailers. Online retailers have been having a field day and will continue to strengthen. Apparel companies have had a tough year and there may be some challenges for them. I think my main concern is the actual fabric of golf – the clubs.
While many have had bumper amounts of play this doesn’t automatically mean they have made lots of money. Income streams have been severely curtailed for many with limited F&B and little society or event income. This often provides the margin for clubs to survive. It will be interesting to see how they survive through the winter and if cost control and extra green fee income is enough to keep them going for next season.
Is there any measurable data showcasing how the golfing population within the UK is evolving in terms of overall participation with the sport?
There isn’t any data available at the moment comparing golf to other sports. There is due to be an Active Lives survey completed to cover this period. It should be out towards the end of the year.
With the UK now moving back into lockdown - how do you see that impacting the golf industry?
The UK isn’t in total lockdown. Wales and Scotland have their own arrangements and golf is currently permitted. England has a 4-week lockdown and all the golf courses are closed. This will obviously have an impact and reduce the overall rounds play and retail numbers.
The only upside is that November is a relatively small month so the overall impact should be far less than in April and May. Some club brands will be glad of the break as it gives them an opportunity to clear backlogs of orders. Some courses will also benefit from a rest and will perhaps be in better condition to survive the winter. I am trying to look on the positives here!
The R&A and USGA have put on hold till at least 2021 any final decision on what steps the two major organisations may do regarding the distance gains coming from golf balls. How do you see that playing out and can a bi-furcated sport succeed at both levels?
We don’t make the rules for equipment, we just count the sales. The R&A and the USGA have a much better perspective and expertise on the rules and regulations and we will leave this in their hands to decide.
Gauging the future is never easy - but how do you see the 2021 season playing out in the UK and the European continent?
That’s an interesting one and if I had the answers I would be sitting on the beach right now! First thing to consider is that the effects on golf have been very different across Europe. Sweden has had one of its best years ever, and Germany is up. France is down, but less than the UK. With the emergence of a possible vaccine you would hope that things will return to some version of a historical norm in the next 12 months for all countries. Focusing on the UK, I would expect it to return to a more normal year – similar to 2019, but up bit. I think new and returning players will continue to enjoy the game and drive sales next year.
Economy and weather will have a big impact. The UK government has pumped a lot of money into the economy. I hope that will keep things ticking over so that employment is maintained. Unfortunately, we can’t control the weather but even with a typical year we should be able to make a good run of it in 2021.