Pro Content

2020 German Boardsports Market Insight Roundup

2020 and what a rollercoaster ride it‘s been so far! Economic data has probably never been so immediately connected to private perception, with COVID-19 restrictions directly affecting both private and professional life alike. The ultimate mental stress for any business! By Eric Bruweleit

But how did 2020 start? For the last quarter of 2019, the GDP closed out flat for Germany. Stable.

At the turn of the new year, December 31, 2019 to be exact, the WHO China office had been informed about cases of pneumonia in the city of Wuhan. For Germans, it was just another virus on the news, far away. Nothing to be worried about. The first few European cases of COVID-19 soon became an avalanche, followed by restrictive actions implemented by each German federal state more or less individually.

On March 22, Germany went into lockdown mode. While the economy had been stable for the first two months, the index for consumer confidence (GfK market research) and the general business outlook (ifo Institut) showed a decrease towards the end of Q1. This resulted in GDP declining by 1.8% compared to Q1 of 2019.

Fighting the effects of lockdown mode, the German government implemented an extensive plan including financial emergency aid, loans, monthly support, and short-term working benefits.

Malte from Surfline Kiel recalls the situation as being a shocker. “Last winter wasn’t great, but we restocked late season regardless. Then, we were shutdown with a great sense of uncertainty and were left guessing at how long this situation will last.”

For Mosaic Skateshop and distribution, Philipp Schmidt reports: “Low temperatures in the first months of the year caused a slow start to the season, then the lockdown was announced and basically stalled everything. Unsure of the situation they were in, dealers started asking to cancel their pre-bookings for spring. Imports had been delayed, and on top of this, our own store in Gießen was closed. That uncertainty was a huge challenge!”

Waketoolz Shop and Waketoolz Wakepark opened their season just a week prior to being locked down, on March 15. For CEO Andreas Voss the wakepark season was stopped before it even began. “We lost nine weeks of business and were finally able to re-open on May 18. During the first weeks, we had to keep our changing rooms, showers and catering closed. We basically had to tell our customers to turn up, get their gear ready while they were waiting on the lawn, shred, and leave as quickly as possible.”

It soon became clear that the lockdown would lead to serious economic consequences. In Q2 the German GDP dropped by 11.3 % compared to Q2 of 2019, while the GfK index peaked negatively in May with -23.1 points. During June, the unemployment rate jumped up by 1.3% to 6.2% (compared to June 2019), despite the short-term working benefits helping to keep a lot of people employed.

During lockdown, consumers focused on buying online which led to a strong increase in online retail sales in March, climaxing in April (Destatis). On April 20, the lockdown was relaxed by the federal states with varying rules for re-opening brick-and-mortar stores. Numbers of COVID-19 cases dropped significantly in Q2, bringing back confidence and positivity. Early June, the German government decided to install another economic stimulus package to stop the downwards trend. Among other tools, VAT was lowered from 19% to 16% from July 1 on, for the rest of 2020.

In Q2 things started to brighten up for most boardsports dealers. “It took about a week for people to re-discover life, then people started coming in their masses. Most were looking specifically for watersport hardgoods”, says Malte (Surfline Kiel).

Hannes Winter who runs HW-Shapes in Rostock had roughly the same feedback: “People needed to compensate for the fact that team sports were still prohibited. They came looking for skate gear, surf hardgoods and wetsuits. Apparel sales had been slow at first, then they started picking up as well.”

Philipp (Mosaic) renders the situation: “After re-opening, with temperatures climbing, retail and wholesale saw sales of skate hardgoods turn extremely positive. On the other side of things, in production countries COVID-19 provoked delays and product shortages. The supply chains couldn’t keep up with the demand.”

In both indexes, GfK and ifo, the general business outlook started recovering in May and June, peaking in August and September to an almost pre-COVID level. After rock bottom in Q2, the GDP jumped by 8.2% in Q3 (compared to Q2/2020). Not all retail branches experienced the same recovery. Though, believing the positive feedback from boardsports dealers that offer a variety of skate and watersports hardgoods, this industry has profited from its outdoorsy character more than others.

“This year, we’ve been able to track a 50% conversion rate from first-lesson beginners to a repeat-visit rider. Even in September and October we had double digit growth in visitors compared to the previous year”, reports Waketoolz’ Andreas Voss.

In Q3 and Q4, the second wave of COVID-19 didn’t spare Germany. After a steady but moderate increase in August and September, the number of new Covid-19 cases exploded from October onwards. Closely following the decision made by a couple of neighbouring countries, the German government decided to switch to lockdown-lite by limiting personal contact and leisure activities, for the month of November.

“Despite the second lockdown, we’re going to close 2020 with a positive company result. In particular, the wholesale business delivered good growth for us”, sums up Philipp (Mosaic).

For many boardsport stores, snowboarding and winter sports are an important part of their business. In summertime, retailers could rely on the whenever, wherever properties of their product portfolio. Snowboarding is different. Besides good snow conditions, freedom to travel is generally required. For November, overnight stays within Germany for leisure purposes are off-limits. All nine neighbouring countries are declared risk areas (by RKI) making easy travelling basically impossible.

“We’re already preparing our shop for winter, when it transforms into a snowboard store”, says Malte (Surfline Kiel). Snowboarding usually generates 40% of their annual turnover. “With all the travel restrictions and lockdowns applied, we don’t expect much from this upcoming winter”, states Malte.

Markus Burgstaller from Sports & Trends in Gilching reports: “Skate hardgoods are still selling, but snowboard gear hardly moves. Due to the restrictions, we had to cancel all of our snowboard day trip offerings, which usually keeps our winter customers entertained.”

The COVID-19 situation in Europe might disable cross-border winter tourism. Classic German destinations for alpine winter sports have already seen a huge growth in demand, but the second lockdown brings back a serious level of uncertainty.

On November 13, Bayerische Zugspitzbahn Bergbahn AG would have opened Germany’s highest elevation ski resort Zugspitze. “We could have opened on time with very good snow conditions, the slopes have already been prepared. We’re now on standby until end of the month. In the meantime, if temperatures drop, we will start producing snow for our lower elevation resort, Garmisch Classic. Given the indoor restrictions, we have improved our outdoor catering immensely with a varied offering of BBQ, tea-bars and we’ve even converted an old cable car cabin into an outside kiosk”, reports Verena Altenhofen (company spokesperson of Bayerische Zugspitzbahn Bergbahn AG).