Industry news

Does the economic downturn affect badminton and squash sales?

The number of South African badminton players have grown steadily the past few years, while squash boasts 529 000 adult participants and about 700 000 adult spectators, not even recording the fans supporting the 45 junior open and closed championships in the country annually.

Judging from the “State-of-the-sport-addresses” by Larry Keys, president of Badminton South Africa, and Liz Addison, chief executive officer of Squash SA, retailers could be performing well as there is enough interest in the sport.

There is one major problem, though...

South Africa’s leading indicator of economic growth, which predicts trends six to 12 months in advance, fell by a record 13,9% in November, as official data showed at the end of January.

The Reserve Bank’s composite leading business cycle indicator — compiled with data from surveys, local share prices and SA’s main trading partners — has been falling since April 2007, with the pace gathering momentum late in 2008, reported Business Day in January 2009.

Economic growth stuttered to 0,2% in the third quarter of 2008, its slowest pace in a decade, curbed by contractions in mining, retail and manufacturing.

No wonder that sports retailers were not too happy with the amount of money customers spent over the holiday season (The year ahead: 2 Holiday sale indicators) — which is supposed to give most retailers a comfortable cushion for the year.

Healthy state of SA squash

According to the BMI Sport Info report, there are 529 000 adult participants in squash, of whom nearly 53% are social or casual players. There are about 700 000 adult spectator interested in squash, making it the 37th most popular sport in South Africa. Of them, 42% are black and 58% white, coloured and Asian.

There are 45 junior open and closed championships held countrywide annually, while 34 senior championships are contested every year.

The interest in squash at school level is stable. In Central Gauteng, for example, 36 schools are taking part in the Central Gauteng league, and even more schools are participating in Cape Town.

There are 270 clubs, representing about 1 500 courts, affiliated to Squash SA. In addition, a number of private people, including former provincial players, have their own courts. There are squash courts in numerous secure complexes in Johannesburg and around the rest of the country.

Hotels, holiday resorts, for example Sun City, a number of game lodges and even corporate companies have courts.

While all this indicates healthy growth in the interest in the game, Squash SA unfortunately has no idea how many players that represents, says Addison.

“But, there has definitely been a trend over the past few years of a swing away from structured league squash amongst senior players, and in particular women, in all areas. Country district areas have the added challenge of the distance needed to travel and safety at night,” says Addison.

Badminton’s big brag

Keys, president of Badminton SA, says at this stage there is no sign that the current economic slow-down has affected the popularity of badminton.

The South African membership increased by 13% from 2006 to 2007. “We have no finalized figures for 2008, but 80 % of our provinces have recorded increased membership, so it looks good.

“Our strength is in the schools. In 2008, we had 38 schools participating in our SA Schools tournament, which was a record. We estimated about 60 000 people are playing the sport, competitively and recreationally,” says Keys.

Five South Africans participated in badminton at the Beijing Olympics, while eight athletes are currently world ranked.

John Abrahams, of Shuttle Sports, distributor of Yonex, says the South African badminton market has performed steadily the past year. “At our major outlets sales of badminton products have increased nicely,” says Abrahams.

“Our sales of badminton units were almost identical in 2007 and 2008. In 2008, however, the sales of shuttlecocks increased by 14%, which is a positive sign. Players might hang on to their rackets a while longer, but they are using more shuttlecocks, which points to an increased activity in badminton,” he adds.

A few big chain groups mostly stock entry level rackets for the social players, while they might also make the odd racket at intermediary level available, he says.

Ebb and flow for retailers

Ronel Louw, owner of Baseline Runners, says the sales of squash rackets have dropped over the past two to three months. Normally, she has to replace a bundle of leading brand name rackets after two to three months – at one stage she sold about twelve rackets per brand per month, but in January she sold no rackets of some of the brands.

Also, customers currently prefer to buy the cheaper squash racket. They would opt for a R599-product instead of one with a price tag of R1 000.

There is, however, an increased demand for the repair and restringing of graphite rackets, she says. She has been selling a lot of squash socks, but not shoes, as her main supplier ran out of stock.

She does not sell badminton products, as she believes the activity level in her area has dropped dramatically the last few years, says Louw. “This sport was very popular at a stage, but that is no longer the case,” she adds.

Tony Jackson, owner of Tony Jackson sport, says squash and badminton sales account for about 30% of his turnover, with tennis providing the bulk of his business. The economic slow-down has affected his sales by about 10% over the past twelve months.

“Last year was an average year for trading. Turnover was pretty static and there were no excellent months. I find that squash players are not as faithful as tennis players. Therefore, they will buy wherever they are at the time when they need a racket. Badminton is very quiet in this part of the world,” says Jackson.

“Prices have just gone up (some by as much as 30%), so I cannot give any details of what to expect with the current slow-down. I think it will definitely affect our sales, but only time will tell,” he adds.

Ahmed Ayob of Ayob Sports, says excellent customer relationship and their ability to offer five star service, has enabled Ayob Sports to maintain steady growth in the sales of squash products. The sales of badminton in the Durban-area have declined a bit, though. “The government is not doing enough for this sport,” he says. “There is a market out there, but it has slowed down.”

In terms of squash products, the sales have remained steady for the past year. That is mainly due to the customer-relation policy of his company. “My dad has been in the business for 27 years. Our policy is that the customer is king. When a customer buys a product, we view it as an investment in his career.

“South Africa is a highly price conscious country and when players say he can only afford a racket costing R700 instead of R900, I usually let him play with the cheaper racket to see if that is what he wants. Sometimes he comes back and says he would rather take the upgrade.

“Generally, it is true to say that we have maintained our sales over the past twelve months,” adds Ayob.

Anton Klopper, director of Kloppers Sport in Bloemfontein, says he recorded strong and dramatic growth of squash products the past year. That is partially because of a thriving schools market in Bloemfontein. Grey College boasts the fifth or sixth best team at schools level in the country, while St. Andrews has the second best schools team in SA. As a result, squash as a competitive and social sport is healthy and thriving.

“The tendency in this unfavourable economic climate is that players buy the cheaper rackets. Aluminium rackets are by far the best selling, followed by cheaper composite rackets. That part of the squash market has grown a lot. The top-end market has shown a drop, but is not totally dead. The top-end market in badminton has dropped, though.

“The squash and badminton shoe market have shown the same tendency: the cheaper shoes of all the brands are selling the best,” said Klopper.

Although the cheaper badminton rackets and shoes are selling well, there has been a drop in the general interest in the sport, he believes. At one stage, in the years after 1995, badminton grew strongly, but currently there is a drop in interest, Klopper believes.