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Posted by: Sportslink on 10/05/2017

‘Look out, here comes Decathlon’

‘Look out, here comes Decathlon’

According to market analysts IBISWorld, the opening of the Decathlon store in western Sydney this month will be a major disruptive force.

And it is mostly due to prices and private labels.

The opening of the French brand’s first bricks-and-mortar store in Australia will impact Rebel, Amart Sports, BCF and Kathmandu says IBISWorld senior industry analyst Lauren Magner.

She says, “Since the launch of Decathlon’s online platform in the Australian market in April 2016, the French retailer has already attracted substantial consumer demand, generating about $100,000 in sales each month.” 

”Decathlon has plans to open up to 100 stores in Australia, at a rate of about two to five stores a year… it is expected to take market share from existing major players in the sporting equipment industry, as well as discount department stores and will be a major competitive force in the years ahead,” Magner says.

Decathlon stores are expected to range in size between 3,000 to 4,000 square metres, which she says is “double the size of Rebel and Amart Sports.

IBISWorld anticipates the company will place significant pressure on these competitors, and discount department stores, such as Kmart, Target and Big W.

At its headquarters in France, the company creates over 2,800 new products and 40 patents every year.

Decathlon primarily focuses on selling private label products at prices that are typically 50 to 70 per cent cheaper than comparable branded goods.

This model has proven successful worldwide, with the company achieving annual sales of $15 billion across 1200 stores in 30 countries, IBISWorld research revealed.

Lauren Magner reports, “Decathlon’s expansive and diverse range of more than 7,000 sharply-priced products across 70 sports and leisure categories is expected to attract strong demand from value-conscious consumers who enjoy activities such as camping, hiking, cycling and snorkeling.“ 

The $4.5 billion sport and camping equipment retailing industry has enjoyed strong growth over the past five years, with industry revenue expanding by an annualised 2.1 percent, according to IBISWorld.

Revenue for the sport and camping equipment industry is set to rise by almost two percent per annum over the next five years, Magner says.

Camping and participation in outdoor and fitness activities have become more popular over the past five years, driving industry demand. However, demand has been somewhat constrained by negative consumer sentiment and sluggish discretionary income growth.

 “Consumers have become increasingly price-conscious and will look for products that deliver the best value. Decathlon is set to benefit from this shift in consumer behaviour, due to its range of affordable goods,” says Magner

“Players in the sport and camping equipment retailing and hiking and outdoor equipment industries are facing pressures that many other retailing industries are grappling with, including rising competition from online companies, increasingly discerning consumers and lower discretionary incomes.”

 • Sportslink Slinki has requested comment from Super Retail Group