Sporting Goods 2025—The new balancing act: Turning uncertainty into opportunity

The sporting goods industry faced a difficult environment in 2024. Softer growth prospects, persistent inflation, and cautious consumer spending all tested companies’ resilience. Despite these hurdles, the industry managed to sustain a growth rate of 7 percent a year from 2021 to 2024 (Exhibit 1). The growth outlook for 2024 to 2029 is projected at a slightly more modest 6 percent a year, driven by a slowdown in the Asia–Pacific, Western Europe, and Latin America regions.

Image description A series of stacked columns track the annual growth of the global sporting goods industry by region from 2017 to 2029. Overall, the total rate of growth is forecast to decline slightly, from 7% for the 2021–2024 period to a projected 6% for the 2024–2029 period. By region, North America is forecast to grow from $114 billion in 2017 to $209 billion in 2029. Asia–Pacific is forecast to grow from $63 billion in 2017 to $141 billion in 2029. Western Europe is forecast to grow from $53 billion in 2017 to $91 billion in 2029. Latin America is forecast to grow from $15 billion in 2017 to $44 billion in 2029. Eastern Europe is forecast to grow from $11 billion in 2017 to $20 billion in 2029. The rest of the world is forecast to grow from $16 billion in 2017 to $43 billion in 2029. Note: Figures may not sum to 100%, because of rounding. Constant foreign exchange rates. “Rest of world” includes Africa, Australia, the Middle East, and New Zealand. Source: Euromonitor End of image description

This year’s report, 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 (see sidebar, “A report on the global sporting goods industry”). Brands are up to the task. According to a recent World Federation of the Sporting Goods Industry (WFSGI) survey, 44 percent of industry executives are feeling optimistic or rather optimistic about 2025,¹WFSGI Sporting Goods Industry Executive Pulse Check, December 2024. a signal of their cautious confidence in seizing opportunities amid pervasive challenges. This report explores key themes that will shape the market and highlights consumer trends that could represent paths to growth.

Chasing elusive growth and rethinking the value chain

In the first chapter of this report, we highlight the industry’s future focus on revenue and productivity. With cautious consumers reevaluating their discretionary spending, companies must mitigate the lasting impact of inflation.

The industry has another challenge on the horizon: Eighty-four percent of sporting goods executives expressed concern about the impact of the geopolitical environment on their business.²WFSGI Sporting Goods Industry Executive Pulse Check, December 2024. Potential tariff increases this year could have a significant effect on the sporting goods sector, particularly in terms of pricing and supply chain management. Additionally, consumer spending may be further affected, especially in discretionary categories such as sporting goods. Companies can prepare by accelerating efforts to derisk and diversify their supply chains. For example, they could review their supply chain footprints and inventory management practices as well as boost efficiency through increased automation and digitalization.

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.³WFSGI Sporting Goods Industry Executive Pulse Check, December 2024. In addition, the chapter emphasizes the need for supply chain diversification to mitigate risks.

In the remaining four chapters, we drill down into further key themes that will likely feature on executive agendas in the year ahead.

Physical inactivity as the biggest untapped market

Despite the significant benefits of physical activity, the share of adults who are inactive jumped from 26 percent in 2010 to 31 percent in 2022 (Exhibit 2). More alarming, this trend could endure in the coming years, with the World Health Organization projecting inactivity levels to reach 35 percent by 2030.⁴Tessa Strain et al., “National, regional, and global trends in insufficient physical activity among adults from 2000 to 2022: a pooled analysis of 507 population-based surveys with 5.7 million participants,” The Lancet Global Health, August 2024, Volume 12, Number 8.

Image description A column chart illustrates that physical inactivity grew from 2010 to 2022 and is projected to increase through 2030. Numbers for physical inactivity are shown in three side-by-side columns: both sexes, women, and men. In the baseline year of 2010, 26% of the population was physically inactive, with women at 29% and men at 24%. In 2022, 31% of the population was physically inactive, with women at 34% and men at 29%. Projections for 2030 estimate that 35% of the population could be physically inactive, with women at 38% and men at 32%. Source: Tessa Strain et al., “National, regional, and global trends in insufficient physical activity among adults from 2000 to 2022: A pooled analysis of 507 population-based surveys with 5·7 million participants,” Lancet Global Health, August 2024, Volume 12, Number 8 End of image description

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.

The good news is that sporting goods companies have an opportunity to take targeted action to empower sedentary consumers to increase their physical activity levels. They could seek to remove barriers to physical activity for more sedentary segments, including via product innovation, marketing campaigns to raise awareness, and enhanced youth engagement. For example, Adidas’s Stay in Play product line and Nike’s modest wear line aim to address specific consumer barriers, while initiatives such as New Balance’s Run Your Way campaign and ASICS’s The Desk Break campaign raise awareness and promote physical activity. Shimano is collaborating with school bicycle clubs to teach children how to ride a bike and raise awareness about cycling.

Active lifestyle as identity

While physical inactivity has reached record levels around the world, there is also a consumer segment that is increasingly active. McKinsey’s latest survey of these active consumers in the sporting goods sector revealed an expanding gap in activity levels, with physically inactive and active cohorts drifting ever further apart.⁵McKinsey Sporting Goods Report Consumer Survey, December 2024 (total n = 3,606; active consumers n = 1,842). For those already engaged in activity, exercise has evolved from a casual pursuit into a linchpin of health regimens and a defining element of personal identity. This shift stretches beyond the decade-long athleisure trend, heralding a deeper transformation in which an active lifestyle has become a central touchstone for a growing share of consumers (Exhibit 3).

Image description Two sets of bars provide results from a survey of more than 1,800 active consumers on their attitudes toward physical activity. The exhibit features the share of respondents who strongly agreed or agreed with nine statements, divided into all active consumers and those who are millennial and Gen Z. For the statement, “I always make time to exercise,” 54% of all respondents and 58% of millennial and Gen Z respondents agreed. For the statement, “Fitness and doing sports are a core part of my routine,” 51% of all respondents and 58% of millennial and Gen Z respondents agreed. For the statement, “Fitness is not just a hobby; it’s a lifestyle,” 51% of all respondents and 59% of millennial and Gen Z respondents agreed. For the statement, “Fitness and my active lifestyle are a core part of my identity,” 48% of all respondents and 55% of millennial and Gen Z respondents agreed. For the statement, “I exercise/do sports because it reaffirms my self-image,” 46% of all respondents and 60% of millennial and Gen Z respondents agreed. For the statement, “My fitness routine consists of several sports,” 39% of all respondents and 50% of millennial and Gen Z respondents agreed. For the statement, “I follow a strict training schedule,” 26% of all respondents and 37% of millennial and Gen Z respondents agreed. For the statement, “I have started a new sport in the last 12 months,” 26% of all respondents and 41% of millennial and Gen Z respondents agreed. For the statement, “I have started doing a new sport in the last 12 months because I saw many people on social media doing this sport,” 16% of all respondents and 27% of millennial and Gen Z respondents agreed. Source: McKinsey Sporting Goods Report Consumer Survey, December 2024 End image description

This trend presents an opportunity for sporting goods brands to develop products that meet the emotional and functional needs of active consumers and foster long-term loyalty. Understanding the deeper motivations behind consumer choices allows brands to create offerings that resonate on a personal level, enhancing product design and marketing strategies.

Market share reshuffle

Over the past decade, the sporting goods market has witnessed a proliferation of new entrants, including both general apparel players (which have strategically expanded their portfolios to feature activewear) and specialized players, each offering a tightly focused value proposition for segments such as running, yoga, cycling, or gym attire. This specialization has enabled challenger brands to tap more deeply into the identity of consumers that gravitate toward brands that feel more “for me” rather than “for anyone.” Coupled with declining barriers to entry, this specialization has fueled the rise of challenger brands. In a telling sign of industry realignment, these contenders have eclipsed large incumbents Adidas and Nike in revenue growth and hence market share gains. From 2019 to 2024, publicly traded challenger brands expanded at a faster rate than major incumbents; the two largest players ceded three percentage points of market share during this period (Exhibit 4).⁶Dylan Kelly, “On Running expects to make more than $2.6 billion USD this year,” Hypebeast, November 13, 2024.

Image description In the sporting goods industry, the two largest incumbents lost three percentage points of market share from 2019 to 2024, while the rest of the companies, driven by challenger brands, gained three percentage points in market share. Three stacked columns representing the years 2019, 2022, and 2024 segment the market share into two categories: large incumbents (Nike and Adidas) and the rest of the market, including challenger brands (including both older, already scaled challenger brands such as Lululemon and On as well as newer, smaller challenger brands such as Arc’teryx and Hoka). In 2019, large incumbents accounted for 27 percent of the market compared with 73 percent for all other companies. In 2022, large incumbents accounted for 26 percent of the market compared with 74 percent for all other companies. By 2024, large incumbents accounted for 24 percent of the market compared with 76 percent for all other companies. Source: Euromonitor End image description

How have newer brands managed to expand their market share so rapidly? At a high level, they have focused on pursuing specific pockets of growth and expanding their reach in several ways: crafting a sharper value proposition, delivering visible innovation with platform potential, tapping into cultural marketing, and harnessing wholesale and selective retail.

Sporting goods brands with a winning value proposition and a strong emotional connection have proliferated. This dynamic raises a dilemma for ambitious brands: how best to continue their growth journey and increase market share while retaining the attributes that distinguished them in the marketplace. The report explores two potential archetypes for future growth: stand-alone brands built through successful growth recipes and houses of brands formed through acquisitions. To maintain their competitiveness, sporting goods executives would need to objectively assess their strengths and extend their reach.

Boom of blended live sports and entertainment

The industry is observing a resurgence of in-person fitness as well as live events. This dynamic presents opportunities for sporting goods companies to reassess their business models, marketing strategies, and customer outreach.

Consumers have flocked to in-person fitness options. The McKinsey Sporting Goods Report Consumer Survey found 81 percent of respondents attended in-person fitness classes in the past year—nearly two and a half times as many as those who used online fitness classes. Consumers choose in-person fitness classes to boost their motivation and consistency, to benefit from the group atmosphere and energy, and to increase their sense of community or belonging and meet new people.

After the isolation experienced during the COVID-19 pandemic, the past couple of years have seen a persistent surge in attendance for live events. McKinsey estimates the global live events ticketing market surpassed $100 billion in 2023 and could reach $150 billion by 2030 (Exhibit 5). This thirst for live experiences has led to more venues blending sports, entertainment, and retail; new sports formats featuring competition and spectacle; and more sports-based content.

As consumers increasingly seek community-oriented fitness experiences with an entertainment angle, brands that can effectively combine in-person and digital offerings will be well-positioned to thrive. They could seek to develop a balanced approach to cater to both in-person and remote audiences, maximizing growth opportunities by blending live and digital experiences. In addition, brands could capitalize on the intersection of sports and entertainment by partnering with other players or producing their own live events, creating unique opportunities for brand engagement and loyalty.

The past year has marked a period of recalibration for the sporting goods industry, with uneven recoveries and persistent challenges. Looking ahead, we believe the most successful brands will innovate to address shifting consumer demands, manage supply chain complexity, and streamline operations. Through efforts in these areas and a sharp focus on execution, the industry will be well placed to continue its positive trajectory.