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Business Edge

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NGF: GOLF SPENDING UP IN 1999: Golf in the United States is a $22 billion industry, and spending in 1999 was up 1.7 percent over 1998, says the National Golf Foundation in the 2000 edition of its annual Golf Consumer Spending in the U.S. study.
The study, which relies on 10,000 mail surveys, delves into seven categories: course fees (public and private), range balls (on-course and stand-alone), clubs, balls and soft goods (bags, gloves, shoes and related items). Fees dominate, as usual, accounting for 73 percent of total spending.
Among the winning categories, stand-alone range ball spending increased most, beating 1998 by 7.4 percent. Spending dropped in only two categories. Club sales were down 6.6 percent, which the NGF put off to sluggish consumer replacement cycles. A 3.7 percent dip in soft goods sales happened because of a down shoe market, the study said.
Behind the copious supply of numbers in the 14-page report is evidence of trends and truths in the American game. Some of these facts will be of interest to industry power brokers, many of whom convened for a conference on golf's future in the week before Thanksgiving.
The more people play, the more they spend. Golfers who play the most rounds - anyone who plays 25 or more rounds per year, by the NGF's definition - account for more than half of all golf spending. In 1999, they weighed in with 53 percent of the dollars. So-called moderate players (8-24 rounds per year) contributed 36 percent, and occasional players (1-7 rounds per year) kicked in only 11 percent. Pumping up rounds played, which have been relatively flat over the past few years, will be crucial for growth.
The longer people stay in the game, the more they spend. This should give pause to those who say golf loses as many people as it attracts each year. Golfers who have played the game for 20 years or more account for 38 percent of golf spending. From there, the percentages decline: Players with 10-19 years experience spend 30 percent of the dollars spent of golf; four-to-nine-year players spend 22 percent, and those who have played less than four years spend only 10 percent. If you buy the NGF's data, retention becomes even more important.
The rich help the industry get richer. Golfers from households with annual income of $75,000 or more contribute 53 percent to total domestic golf spending. (And as expected, they kick in the most in the private fees category.) Households in the $50,000-$74,999 range account for 23 percent, and under-$50,000 households spend 24 percent. No wonder major manufacturers charge - and get - high prices for premium clubs. But are the lower income categories fields for future growth? Keep an eye on the value-priced equipment segment in 2001.