Deemed a key transport and exercise form by several governments after lobbying pressure, bicycle retailers remaining open during the lockdown have experienced something of a ‘boom’ period in the UK and around the world, but it seems the same cannot be said for the global sporting goods industry.
The World Federation of the Sporting Goods Industry (WFSGI) has shared the outcome of the May edition of its Covid-19 Impact Survey, which reveals the pandemic continues to have significant impacts on the sector and supply chains.
WFSGI President, Robbert de Kock, said: “The results of our May pulse survey show that Covid-19 is, as expected, having a sustained negative impact on our industry. However, there are flickers of positive information such as the partial recovery of supply chain disruption in Europe and South Asia that seem to suggest we are moving toward the recovery period.”
The survey signalled that some logistical improvements had developed since April, with factories seeming to have reopened on a large scale. Shipping companies also seem to have increased their capacities as only 12% of respondents face shipping issues, a considerable drop from the previous month’s survey.
However, 70% of respondents continue to face supply chain disruption, with the situation remaining unchanged for the whole of the Americas and the African and Middle East region. There are promising developments taking place in South Asia, though, and Europe where the situation has substantially improved.
Half of survey respondents said they are challenged by labour shortage, although 50% less are affected by factory closures and shut down of public transportation compared to April, in line with regulatory government measures.
80% of respondents cited cash flow as a crucial challenge, with the situation showing only minor improvement from last month. Almost all (90%) of those participating in the survey still see their business being impacted by the pandemic, with the majority expecting a 50% drop in business. The most affected regions remain Europe where 80% see a decline of their business, and Northern America with 70%.
According to WFSGI, industry confidence has also changed compared to last month, with double as many respondents having a pessimistic outlook and expecting no recovery at all. Timewise, double the number of respondents in May believe they will need more than one year, compared to April.
Planned measures by companies to mitigate the impact of the pandemic remain generally the same as they were in April, with 64% of respondents opting for increasing online sales. Meanwhile, almost 40% said they would keep minimum inventories and wait it out.
Regarding future supply chain transformation, 57% opted for lean supply chains, while being cost sensitive has gained in importance compared to previous survey responses. Half of companies will not change their sourcing priorities, while half as many respondents (compared to April) have opted for local to local and regional centric sourcing.
“We hope that is information continues to be of value to our members and to the broader industry and we thank the companies who have participated to date,” added de Kock. “We would encourage all companies to participate in the June edition so that we can continue to provide you with timely updates on the key industry trends in exit and recovery.”
Companies can participate in the survey here.