Almost half of marine retailers responding to a survey reported growth in January, 49 percent, versus 23 percent reporting a decline. This is an improvement over recent months. In December, for instance, 36 percent of retailers said business had increased, compared to 31 percent saying it was down.
“Popular segments continue to grow,” wrote a retailer responding to The Pulse Report, a survey administered by Baird Equity Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only to gauge retail trends on a monthly basis. “Aluminum fish and pontoon boat segments are keeping us going,” he added.
Retailer sentiment about current conditions improved dramatically to 69, versus 54 in December, and the three- to five-year outlook also improved slightly to 56, from 54 last month. Dealers cited innovation, new products, expansion and promotions as tailwinds.
Several commented on strong winter boat show sales and leads, though others said their regional shows had been flat, reiterating market choppiness.
More dealers (55 percent) predicted retail growth than declines (22 percent) in 2020, with the majority saying they expected the industry to increase 2 to 3 percent, followed by those who said they thought it would remain flat with 2019.
Dealers also reported improvements in inventory levels, with 64 percent of the 78 dealer respondents saying inventory was too high and 15 percent reporting that it was too low, according to the survey. Several dealers reported that they felt manufacturers were trying to push new boats on them.
“Boat inventory levels are high, with more coming,” one dealer wrote. “Manufacturers are still out of touch with inventory levels and what makes dealerships successful,” said another.
Government action/inaction seemed to be a drag on business, according to several respondents. “The tax cut has worn thin, the Fed looks to slow increases in its balance sheets, and the out-of-control government spending has to slow at some point,” wrote one dealer. “When all these things come together, the market will most likely pull back. This will have a deflating effect on consumer morale and confidence. Are we positioned to meet the challenges that will present themselves when this occurs?”
Several mentioned the rising prices of boats and the upcoming election year as causes for trepidation.
“Boat manufacturers want to keep shipping new product but are doing little to assist in moving the products sitting at the dealerships,” said one retailer. “Potential boat buyers are being super cautious, especially younger ones with big college debt that needs to be paid off. With the ever-increasing prices on new boats, we are decreasing the next generation of boat buyers to a tiny percentage. Just look what $100,000 buys you in a boat now.”
This article originally appeared in the March 2020 issue.