Dive Brief:
- North American retail sales of sports-related apparel and footwear are projected to reach $173 billion in 2025, and increase to $209 billion by 2029, according to the Sporting Goods 2025 trends study from McKinsey & Company co-authored with the World Federation of the Sporting Goods Industry.
- The report found that from 2019 to 2024, challenger brands such as Lululemon, On, Arc’teryx and Hoka grew at a faster rate than established brands Nike and Adidas, and took 3% of the market from those companies by pursuing niche markets.
- Sporting goods executives are relatively bullish about the category’s revenue prospects in 2025, with 44% saying they feel “optimistic or rather optimistic” about the year ahead, per the report.
Dive Insight:
The sporting goods industry saw its global growth slow slightly from an annual 8% prepandemic to 7% between 2021 and 2024, and the report said the sector is projected to grow 6% annually between 2024 and 2029. Meanwhile in North America, annual growth is projected to level out at its current rate of 5% through 2029.
The report, which surveyed 3,600 consumers in the U.S., UK, and Germany, found that just over half of U.S. consumers remain concerned about inflation and are trading down in their purchasing of sporting goods including apparel and footwear.
“While there’s always some uncertainty about the future, especially heading into 2025, we’re incredibly confident in our direction,” Samuel Wenger, chief operating officer of On said in the report. “The increased desire of people to move and the willingness to pay for premium products are enduring trends. There will inevitably be some disruption, but we’ve learned to live with it and be nimble and even turn it into an advantage.”
Reacting to inflation, geopolitical uncertainty and possible tariff increases, sporting goods companies have modified their previous commitment to sustainability in favor of meeting short-term revenue goals, according to the study. While half of sporting goods executives said that sustainability was a priority for their business in 2025, that was less than the two-thirds who felt that way a year ago.
“Over the past 25 years, we’ve moved from creating the market to developing and expanding it,” Rachel Acheson, senior vice president of enterprise strategy at Lululemon said in the report. “Now, brands are in a new phase, where they need to think about fighting commoditization — or rather, how to position against it. Meanwhile, consumers are reassessing their discretionary spending. People have a lot of choices, so companies have to deliver products that consumers want and that are the best quality.”
The report also found that physical inactivity is a global problem that continues to rise, which presents sporting goods brands with major growth opportunities for people looking to become more active. The World Health Organization estimates that about 1.8 billion people around the world are physically inactive, and those numbers are expected to grow from 31% of the population to 35% of the population by 2030, as cited in the report.
