Sport and Active Lifestyle Businesses Forecast Optimism
Despite the dark clouds of inflation, supply chain disruption and potential recession, San Diego’s Sports and Active Lifestyle (SAL) businesses are feeling pretty sunny about the year ahead.
That is the findings of a recent “attitude” survey of around 90 local SAL businesses conducted by San Diego Sport Innovators (SDSI) – a group representing 130 businesses in the local SAL industry, an industry that has a $5.1 billion economic impact on the region; consists of around 1,200 businesses; and employs around 42,000 people.
“That’s not inconsequential,” said SDSI Executive Director Bob Rief. “One sector of our business community – which delightfully represents the San Diego lifestyle – in general is doing well and is planning on doing well.”
The survey, which was completed last month, was sent to all 130 SDSI members and had around a 55% return rate. The companies in the survey represented both large and small SAL businesses. The survey asked companies to forecast their business for the end of 2022 and all of 2023 with specifics on whether they have met, exceeded or fell below their business plan goals; what their inventory positions were; and what their attitude was for the coming fiscal quarters and year.
“I just asked how they were feeling one way or the other, and the outcome was the exact opposite of what I was expecting,” Rief said. “Given the business headwinds, I expected the possibility of post pandemic stress, recession, inflation, supply chain difficulties to add up to a cautious outlook for 2023. Our members are enthusiastically anticipating a very good year coming, increasing hiring and anticipating high consumer demand for sport and active products or services.”
Highlight results of the survey include:
63% of respondents see 2023 as a year of opportunity;
68% are planning for a significant increase in sales;
68% view their beginning 2023 inventories as acceptable or better; and
93% of all respondents plan to maintain current employee counts or increase staffing.
Pandemic and Recession Proof?
Although the survey did not ask respondents to speculate on the reasons why they are optimistic, SDCI Executive Chairman of the Board Bill Walton pointed out that the COVID pandemic left many people with the time and motivation to adopt healthy habits, including getting outside and being active.
“Our SDSI companies have been in a fortunate place to support this increased demand and as a result, business in the sport, active and healthy-living space has been near or above an all-time sales high,” he said. “We thought it prudent to survey the membership now, at the onset of business planning for 2023, to gain a collective look into the future, to see if this increase in business is sustainable.”
SDSI Industry Chairman of the Board John Sarkisian pointed out that 70% of US GDP is driven by consumer spending and despite macroeconomic headwinds, SAL consumers have healthy balance sheets, driven by high home values and savings. SAL consumers are also either small business owners who may have done well with pandemic assistance or employed and enjoying a tight labor market and better salaries.
“People with jobs spend. And fortunately for our market, they spend on personal health, outdoor gear and apparel, and sport activities,” he said. “My point of view is that changing or transitioning times represent a time of great opportunity, and a time when great wealth can be created.”
Bottle Rocket Advisors founder and SDSI board member Mike Irwin said businesses should replace the “toxic” word “recession” with the idea of “transition.”
“Look back 24 months and the sky was falling. Fast forward to today and we’re seeing historic, unprecedented demand and sales,” he said. “My advice is to find your place in the transition and view opportunity through the aperture of your company and market channel.”
San Diego Sport Innovators
Executive Director: Bob Rief
Business: Nonprofit serving the Sport, Active and Healthy Living Industry business community
Headquarters: San Diego
Members: 130 business members
Notable: The Sport and Active Lifestyle industry has a $5.1 billion economic impact on the San Diego region.