Consumer

Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

Elaine He oversees Bloomberg Gadfly's data visualization work in Europe and also pursues her own columns combining business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.

(Updated )

Aging facilities, online competition, consumer spending shifting to other experiences and millennials behaving differently.

No, not U.S. department stores -- golf. And like the beleaguered retailers, the golf industry will need to change to stay in play.

President Donald Trump might be Golfer in Chief but the industry is struggling everywhere, and especially in the U.S. after a spate of overbuilding that mirrors the glut in retailing.

Feast to Famine
A spate of overbuilding in the early noughties has prompted golf course closures ever since
Source: Pellucid Corp.

The number of players in the U.S. has plunged from a peak of just under 30 million in 2002 to 20.9 million in 2016, according to Pellucid Corp., an industry information provider.

Off Course
The number of U.S. golfers has fallen about 30 percent since 2002 but has stabilized recently
Source: Pellucid Corp.

The number of rounds played has also fallen, though not nearly as sharply. This indicates that while a hard core remains committed, more casual golfers have fallen away and aren't being replaced. The average age of the keen player in the U.S. is 44, according to the National Golf Foundation.

There’s a similar picture in Japan, another bastion of the sport, where the number of players has fallen around 30 percent from its peak in the 1990s.

Under Par
Rounds of golf played in the U.S. have fallen much less than players, indicating there is still a committed base
Source: Pellucid Corp.

Golf equipment makers are suffering. Nike Inc. pulled out of the market, while Adidas AG recently agreed to sell its equipment business. New online competitors, and the ability  to trade gear on the internet, have depressed equipment prices.

Price Plunge
Deflation in golf equipment prompted some manufacturers to exit the market
Source: U.S. Bureau of Labor Statistics
Note: Not seasonally adjusted; excluding shoes and miscellaneous products.

Nike and Adidas still make golf clothing, but most of it can be worn on or off a course. And the association with the sport allows the brands to charge premium prices, says Chen Grazutis of Bloomberg Intelligence.

There are many reasons for golf's decline. The global financial crisis was a big one, but the game didn't bounce back, suggesting that other factors such as demographics are at work.

While the baby boomer generation aspired to play, there's less appeal to tech-focused millennials. Starting golf is expensive, and people have other calls on their leisure time: Look at the explosion of middle-aged men in lycra on both sides of the Atlantic, for example.

Watching golf has held up better than playing it. Younger professionals are helping to fill the void left by Tiger Woods, and TV audiences have been relatively stable, according to Brian Wieser, who tracks sports-viewing trends for Pivotal Research Group. That suggests there's less of a link between picking up a club and catching golf on TV, which Wieser says accounted for 6 percent of U.S. sports viewing this year.

What can be done for the game? Options include making it faster and easier. Meanwhile, just as malls and department stores expand their dining and drinking offerings, "golftainment" is growing. TopGolf, a driving-range-meets-sports-bar with Callaway Golf Co. as an investor, has 29 locations in the U.S. and three in the U.K.

Jim Koppenhaver, Pellucid's founder, says the industry must go further -- Wi-Fi on courses, flexible rules so millennials can take their speakers with them. That might not go down well with traditionalists, but it might keep the game growing.

Efforts so far may be paying off. The National Golf Foundation says more people are taking up the game. The overall decline in players may be bottoming out. Callaway Golf shares are up almost 30 percent over the past year, helped by better-than-expected first-quarter earnings, the loss of competitors and signs of stability in participation and equipment prices.

Out of the Bunker
Hopes that the worst may be over have boosted Callaway Golf
Source: Bloomberg

That nascent recovery needs to feed through into a sustained increase in player numbers, however. Until it does, golf will be stuck in the rough.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the authors of this story:
Andrea Felsted in London at afelsted@bloomberg.net
Elaine He in London at ehe36@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net