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October 2020 Industry Report

With the stock market near record highs, I thought you would find of interest how two “pure play” golf companies listed on the NYSE have faired since the pandemic lows from six months ago.

ELY – Callaway Golf – pandemic low: $5.35/share – today: $20.47

GOLF – Acushnet Holdings (Titleist) – pandemic low: $21.91 – today: $35.51

The stock performance tracks National Golf Foundation/Golf Datatech’s report showing rounds were up 20% in July, outpacing June’s 14% gain over last year. This two-month rebound has allowed rounds played to climb from a 16% YTD deficit to a 3% gain YTD over last year.  Seems almost inconceivable given the loss of 20 million spring rounds from course shutdowns and virus-related anxieties. And the good news is likely to keep coming. Several golf course management companies have reported that August has been almost as strong.

Logo to Remember

Have you ever thought about why the Palmer organization's logo is a colorful umbrella? The answer may surprise you.
 
The story starts at a conference table almost 70 years ago. Plotting the rise of his brand and business enterprise, Arnie agonized with his team over a logo. Ideas included crossed golf clubs or a nature scene. Frustrated, Arnie adjourned the meeting for a walk to clear his mind – in the rain. It was a fateful decision.
 
Soon after he stepped outside, a woman popped open a multi-colored umbrella to shield herself from the inclement weather. Arnie rushed back and queried the group about the concept of an umbrella logo, receiving mixed feedback. One of his advisors questioned if another company had already trademarked the image. Sur­prisingly, the idea was an original, and more than three years since Mr. Palmer’s death, it remains a symbol of his achieve­ments on and off the course. 

Labor Management Tip

Staffing has always been an issue for the golf industry – particularly for those clubs that are seasonal. Now COVID-19 makes it all the more challenging.

Two of my daughters work at In-N-Out Burger – a Southern California based chain that has a cult like following.

The restaurant company started a policy that all workers must be available to extend their shift by 30 minutes, if necessary, with little advance notice.

Considering they have around 15 employees working any given shift – by having the crew work thirty extra minutes – it provides coverage for up to two workers who might call in sick –  without having to hire extra staff.

Considering most aren’t full time employees, it also prevents paying overtime.

Surge in Play

There’s no question the leading driver of golf’s nationwide surge this summer is less resource competition – fewer commitments, fewer trips, fewer available activities, and fewer ways to spend disposable income. There’ve been other transient factors too, like favorable weather, extended shutdowns at golf entertainment venues, and perhaps even a pandemic-induced need for mental and physical escape.
 
According to the National Golf Foundation, the ability to retain customers has been golf’s Achilles heel for some time. In the past five years alone, golf has “welcomed” more than 12 million people to the traditional game, and yet our sport’s “sea level”  has risen by only 200,000.

I hope that the pandemic reorients consumers – making them appreciate open space, fresh air and less crowded activities than before. But, those are probably fleeting effects. It’s our job to make sure there’s a lasting impact.