Since the launch of its online platform in here in April 2016, French sporting goods retailer Decathlon is set to open its first Australian physical store this month, with plans to open 100 stores locally within the next few years.
Global sporting and adventure goods retailer Decathlon is set to open its first Australian bricks-and-mortar store in Sydney in October 2017, which will also be its flagship, marking the arrival of a disruptive force in the sports goods industry.
‘The French retailer has already attracted substantial consumer demand, generating about $100,000 in sales each month,’ said IBISWorld senior industry analyst, Lauren Magner.
“Decathlon has plans to open up to 100 stores in Australia, at a rate of about two to five stores a year – the company is expected to take market share from existing major players in the sporting equipment industry, such as Rebel, Amart Sports, Kathmandu, BCF and Rays Outdoors, and will be a major competitive force in the years ahead.”
Headquartered in France, Decathlon creates over 2,800 new sporting goods products and 40 patents every year. Decathlon primarily focuses on selling private label products at prices that are typically 50 to 70% cheaper than comparable branded goods, according to ISIBWorld research. This model has proven successful worldwide, with the company achieving annual sales of $15 billion across 1,200 stores in 30 countries.
Decathlon stores are expected to range in size between 3,000 to 4,000 square metres, 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.
Decathlon will offer a range of more than 7,000 sharply-priced products across 70 sports and leisure categories, which is expected to attract strong demand from value-conscious consumers that enjoy activities such as camping, hiking, cycling and snorkelling.
“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%,” said Magner.
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,’ said Magner
“Players in the sport and camping equipment retailing and hiking and outdoor equipment stores 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.”
Revenue for the sport and camping equipment industry is set to rise by almost 2% per annum over the next five years.