Free Trial!
Today’s Best Stocks To Trade! Click Here
Located in a former Best Buy store space, the 56,000-square-foot store is the largest golf and tennis retailer in the area, and the Raleigh store is Golfsmith's largest.
Even to an avid golfer, it might seem excessive. But this is the new world of sports retailing.
Rather than all-inclusive stores that stock a few items for every sport, companies are leaning toward stores that are big and specialized, said Mike May, spokesman for the Sporting Goods Manufacturers Association.
"People play sports because they love the atmosphere, and if you can have a retail atmosphere that's as close as you can get to the actual experience, then you have a good chance of getting that person's business the first time and the second and the third time," he said.
The strategy has pros and cons, but more than anything, it benefits shoppers by creating more competition among chains.
However, for an industry that has long relied on mom-and-pops and small pro shops, the consolidation into megachains could signal big changes in sports retailing.
Consolidation
There are nearly 29 million golfers in the U.S., and wholesale shipments are expected to exceed $3 billion for the first time this year. That demand is fueling the expansion of chains such as Golfsmith and Golf Galaxy.
Golf retail will likely go the way of other retail sectors, in which one or two companies emerge as the dominant players, said Matt Corey, Golfsmith's vice president of marketing and brand development. "In home improvement, there's Lowe's and Home Depot," he said. "In books, there's Borders and Barnes & Noble. Right now, we're in the phase that those industries were in 15 years ago."
As the dominant players emerge, they are taking cues from other big-box chains.
At Golfsmith, there is a 115 percent low-price guarantee and a 90/90 policy that allows golfers to buy a piece of equipment and return it as many as 90 days later for a 90 percent credit of the purchase price. Its loyalty club gives shoppers every fifth tennis-racket restringing free.
The retailers also watch each other's prices. Golf Galaxy has two Triangle stores, one in Cary and one in Durham. But the chain goes head to head with Golfsmith in many markets.
"It's inevitable we're going to continue to open up on top of each other," said Ron Hornbaker, senior vice president of sales and operations for Golf Galaxy. "We're definitely competitors. Everybody's fighting for the same market share. ... We shop each other to make sure we're not getting beat and match each other's offers."
Big retail companies haven't ignored the change.
Still room for growth
In 2007, Dick's Sporting Goods paid $225 million for Golf Galaxy.
Still, despite the consolidation, the top five retailers in the business make up only about 14 percent of the market share, Hornbaker said. "We think there's still room for growth," he said.
As the golf retail business changes and consolidates further, we're likely to see those deals play out in the Triangle.
Golf retail companies target the area because of its good weather, high-income demographics and a large number of prominent golf courses.
"When you look at the population, with the weather, with the upscale professional demographic, you have a lot of GolfTEC core customer people who are in that market," said Mike Clinton, co-founder of Denver-based GolfTEC, which moved into this market in 2005 and uses computerized harnesses to analyze and improve players' swings.
But that's not to say everyone in the golf business always succeeds.
Golf Etc. opened an outlet in Wake Forest about two years ago. That location has since closed, though company Vice President Don Willingham said it was due to construction that blocked access to the shopping center, not bad business.
Golf Etc. would consider another location in the Triangle, he said, though the company depends on potential franchisees to step forward, rather than targeting specific cities.
Competing on service
When companies can compete no further on price, they switch to competing on service, Willingham said.
Many manufacturers set a lowest acceptable price for all stores selling new merchandise, so once that price is reached, companies must look elsewhere for ways to differentiate themselves.
"It's across the board with every company," Willingham said. "Some enforce it very strictly. If they catch someone selling below [that price], they can even close your account."
Better for shoppers
In the end, the ones who benefit from the shakeout in golf retail should be shoppers, who could see lower prices, more product selection and more options for where to shop.
Rich Taylor of Fuquay-Varina visited the Golfsmith store on its first day of business this week.
Standing on a practice green that featured a sandtrap, long grass and short grass, Taylor said he thought the area's golfers would support the Golfsmith store despite its massive size.
"We tend to buy anything and everything," said Taylor, who owns a flooring company in Fuquay-Varina, Rainbow Home Interiors.
"We try to buy a [better] game, and if you're going to buy a game, this is a pretty good place," Taylor said. "I would never buy golf stuff from Dick's [Sporting Goods]. Here, you feel like you're walking into a place where they cater to you."
And in the end, that is smart business, said Sporting Goods Manufacturing Association spokesman May.
"I think every sport is in a battle for consumer dollars," he said. "You can never just expect people to come play. You've got to keep marketing, keep reminding people about the sport."
sue.stock@newsobserver.com or (919) 829-4649.
To see more of The News & Observer, or to subscribe to the newspaper, go to http://www.newsobserver.com. Copyright (c) 2007, The News & Observer, Raleigh, N.C. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
