Discounters' popularity as a venue for value-conscious purchasers of sporting goods remains unrivaled and is no doubt partly responsible for several years of difficulties being experienced at full-line sporting goods stores.

Discount retailers such as Wal-Mart, Kmart and ShopKo view sporting goods as more than just a convenience department that fits with their one-stop shopping agenda. Sporting goods is a destination department at these chains and is regularly promoted. Customers can find quality merchandise and reputable brands, especially for their fishing and camping needs. For Wal-Mart and Kmart, fishing is a particularly important category where the assortment of merchandise has been upgraded in recent years as the retailers sought to gain credibility with serious anglers through sponsorship of multimillion-dollar fishing tournaments.

Wal-Mart and Kmart also continue to cater to the hunting customer, and guns are prominently displayed in the sporting goods departments of both retailers' stores. ShopKo, on the other hand, doesn't sell guns even though most of its stores are large and located in Midwestern and Western states, where hunting is a popular leisure pursuit.

Elsewhere in sporting goods, the strategy among discounters varies considerably. Wal-Mart, for example, was quick to jump on the paintball trend, but it offers a minimal assortment of low-end fitness equipment. ShopKo has sought to capitalize on American's fondness for treadmills by stocking a higher-end assortment, and Sears is the nation's largest seller of fitness equipment, offering treadmills priced in excess of $1,000.

Discounters also remain committed to team sports categories, even though participation among America's youth in activities such as baseball, football and basketball is declining. The seasonal nature of team sports and discounters' emphasis on the youngest segment of the market allows them to enter and exit categories with less risk than full-line retailers, whom customers expect to maintain extensive, year-round assortments of slow-turning merchandise. Discounters, especially those with nationwide networks of stores, have also caused full-line retailers headaches because their advanced information systems allow for a better customization of merchandise by climatic and geographic regions.

SPORTS PRODUCTIVITY

Discount segment sales ($mil.) $3,711.65
Dept. size (sq. ft.)               2,579
Sales per sq. ft.                $205.60
Turns                               1.87
Initial markup                    38.34%
Gross margin                      30.06%

Source: DSN Research

COPYRIGHT 1999 Lebhar-Friedman, Inc.
COPYRIGHT 2000 Gale Group