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Sports Market - Market Review 2007
Key Note Publications Ltd, March 2007
UK consumers spent an estimated £9.7bn on sport in 2006. This figure covers the cost of participation (including club subscriptions), sports equipment, sports clothing, sports footwear and admissions to live sporting events. Although it sounds impressive, £9.7bn in fact represents only 1.2% of total consumer spending — a share that has declined slightly since 2002.
Total expenditure on sport is, however, much higher than the figures for consumer spending imply, because sport is subsidised in various ways, enabling less affluent consumers to participate. The Government, through the Department for Culture, Media and Sport (DCMS), encourages sports participation by funding sports councils and local authorities, the latter investing in parks, pools, school facilities and leisure centres. Funds from the National Lottery have also made a major contribution to the provision of sports facilities since 1994, sport being one of the Lottery's `good causes'.
Around half the adult population of Great Britain regularly take part in some kind of sport or vigorous physical activity. However, the majority of people now prefer to engage in a general activity that keeps them reasonably fit and healthy, rather than participating in a codified, competitive sport. The trend towards simple fitness activities started with swimming, jogging, aerobics classes and the use of local gyms in the 1970s and 1980s, but it has progressed to the use of relatively expensive private health clubs. The UK's leading health-club operators include David Lloyd Leisure, Fitness First and Holmes Place, but the market is competitive and may be approaching saturation.
For those who still want competition and challenge, rather than just a healthy lifestyle, the outstanding participation sports are golf and football. However, dozens of other sports, games and outdoor pursuits are enjoyed by fairly large numbers of adults or children, meaning that the equipment market is served by a diverse range of specialist companies. In contrast, the sportswear market is increasingly dominated by just a few brands and retail giants. This market has been founded on the use of sportswear for fashion, rather than function; only a small proportion of the products are used for active sport.
Participation may be inspired by watching professionals, but sport is also big business as a passive activity. Television, radio and the press give sports celebrities saturation coverage, and there is an ongoing battle for the rights to broadcast prestigious events. Commercialisation has improved the facilities at stadiums, but it has also increased the cost of watching live sport.
There is no reason to predict dramatic growth in consumer expenditure on sport between 2007 and 2011, but the period will be a fascinating one. A battle for control of high-street sports retailing is under way, and the giant sportswear brands will be fighting on a global scale. The UK market will have the added spice of the build-up to the 2012 Olympics in London, and the sports market seems certain to reap the rewards on several levels.
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