Brexit, the Millennial question and the endurance sport industry
The morning of 24 June has confirmed that the British people have voted to leave the EU. It also coincides with the mainstream cinema release of Independence Day: Resurgence across the UK. As the politicians from the Leave camp spoke in recent weeks about 24th June being the UK’s chance to ‘have their independence day’, few commentators spoke about how bad the original Independence Day movie was.
It really was bad. Although, few people probably care right now how good or bad the movie sequel is. After all, most of us will start to think about how this all impacts us. Of course, that’s the tricky bit. No-one at this moment is clear on what the outcome of Brexit is going forwards.
For the endurance sport industry, just like any industry, there will be implications. Some companies may experience some short term pain; others may get a short term gain. The key thing is to try and get a sense for the medium-term and long-term effect of Brexit. That’s where it gets really difficult.
For any industry, uncertainty isn’t a good thing as it impacts consumer confidence. In the endurance sport world, the consumer (or athlete, or age grouper – however we wish to think of ourselves) will face some challenges.
An interesting meme has featured recently on social media. This shows the Spartan Race logo and the phrase ‘Keep calm and burpee on’. It’s a nice, irreverent way of taking on all this uncertainty. We can also see it as a way of showcasing that the endurance sport industry is fairly robust. After all, it has delivered healthy growth in recent years – and there is a strong participant base out there across a diverse range of endurance sport categories.
It is worth remembering that age group athletes across the endurance sport world are generally often well-educated, in well-paid jobs and should weather any economic storm that could be on the way.
However, in order to grow and flourish, the endurance sport industry needs to bring in more athletes rather than simply rely on an existing base of consumers spending more. Within triathlon, for example, we are starting to see a stalling in the demographic make-up of the athlete base. In other words, the sport of triathlon is seeing growth in participation for those aged over 40. Yet, there is evidence of contraction in tri participation for those below 40.
The Millennials (or Generation Y, who were born from the 1980s to around 2000) are already feeling the financial squeeze. These younger adults typically find it harder to buy property, and in general have less disposable income.
Large groups of Millennials have embraced obstacle racing, for example. Triathlon is a sport in need of a ‘Millennial recruitment solution’, and could look to obstacle racing to determine how best to entice the younger adult consumer.
This may now be more difficult. Arguably, it is the Millennials who will take the biggest hit from any economic impact from Brexit.
The UK consumer/athlete (across all demographic groups) is now facing a weakened British Pound. This of course means that imports will become more expensive; and, in turn, this could also mean the return of inflation, which will be a shock to many as prices have been relatively stable for so long.
Another worry for the UK endurance sport industry about a threat from inflation is a possible rise in interest rates. While, in a bid to stem inflation, this does make Sterling more attractive, it does mean that the cost of borrowing for investment goes up. In turn, this could impact endurance sport brands, event organisers, retailers, etc., who are seeking to borrow and invest to grow their businesses.
Also, for those home-owning consumers/athletes out there, a rise in interest rates can mean that the cost of monthly mortgage payments could go up too – putting more of a strain on household finances, and making that online order for some expensive gear or a new bike that bit harder to justify.
Another impact of a weakened Sterling is that overseas travel becomes more expensive. Endurance sport races in Europe priced in Euros will therefore be relatively more expensive for the travelling UK athlete.
So, from the middle income and middle aged, through to the more cash-squeezed Millennials, at a macro level there are some fundamental challenges on the horizon.
Of course, a weakened Sterling also means that UK exports are cheaper. So, those overseas athletes buying British products may experience the reverse; and, for major international retailers based in the UK, such as Wiggle & Chain Reaction, the weakness of Sterling could present a boost and an even stronger hand when it comes to price competition overseas.
As the impact of Brexit sinks in for all of us, we can hopefully put all the political rhetoric to one side, keep calm – and try not to be too gloomy.
Perhaps the best thing to do now is go out for a run, get on the bike, hit the water... The endorphins we all get from exercise make us feel better, happier and healthier. This is arguably the key motivator for driving the endurance sport industry onwards and upwards. Whether it is buying gear or entering events, people like to feel good; and training, racing or just participating gives them that feeling.
So, in the words of the late, great musician Ian Dury, there are still reasons to be cheerful.