The global sporting goods industry faced a difficult environment last year, with softer growth prospects, persistent inflation and cautious consumer spending testing companies’ resilience, according to McKinsey & Company.

Despite these hurdles, the industry managed to sustain a growth rate of 7 per cent a year from 2021 to 2024.

The growth outlook for 2024 to 2029 is projected at a slightly more modest 6 per cent a year, driven by a slowdown in the Asia-Pacific, Western Europe and Latin America, McKinsey noted.

Its latest report, titled ‘Sporting Goods 2025—The new balancing act: Turning uncertainty into opportunity’, highlights the dual agenda for sporting goods companies—a simultaneous focus on the top and bottom lines.

A recent World Federation of the Sporting Goods Industry (WFSGI) survey revealed  44 per cent of industry executives are feeling optimistic or rather optimistic about 2025, a signal of their cautious confidence in seizing opportunities amid pervasive challenges.

The sporting goods industry’s future focus is on revenue and productivity. With cautious consumers reevaluating their discretionary spending, companies must mitigate the lasting impact of inflation, McKinsey said in a release citing the report.

The industry has another challenge on the horizon: 84 per cent of sporting goods executives expressed concern about the impact of the geopolitical environment on their business.

Potential tariff increases this year could have a significant effect on the sector, particularly in terms of pricing and supply chain management.

Additionally, consumer spending may be further affected, especially in discretionary categories like sporting goods. Companies can prepare by accelerating efforts to derisk and diversify their supply chains, the report suggests.

Environmental, social, and governance (ESG) and sustainability remain priorities for sporting goods companies, but external factors and business considerations are forcing executives to make difficult trade-offs, leading to a decreased priority compared with last year.

For 2025, half of surveyed sporting goods executives stated that sustainability is a priority for their company—down from approximately two-thirds the previous year.

Despite the significant benefits of physical activity, the share of adults who are inactive jumped from 26 per cent in 2010 to 31 per cent in 2022. This trend could endure in the coming years, with the World Health Organization projecting inactivity levels to reach 35 per cent by 2030.

Physical inactivity also presents an existential risk to the sporting goods industry. If levels continue to rise or even remain constant for younger generations, the market related to physical activity will decline.

However, converting physically inactive segments is the biggest potential opportunity for the sporting goods industry.

The global population that is currently not meeting WHO’s recommended levels of physical activity totals 1.8 billion—an untapped market equivalent to twice the size of India’s adult population.

By Fibre2Fashion 
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