Nearly 90 percent of dealers responding to the Pulse Report survey asking about June market conditions reported retail growth — up from 70 percent in May, the strongest reading in the survey’s six-year history. The strong retail demand pressured inventory levels, particularly in light of manufacturing shutdowns in the spring due to the Covid-19 pandemic. Some 86 percent of respondents characterized new-boat inventory as too low, versus just 3 percent who thought it was too high. That’s another record for the survey.
“The explosion of sales due to Covid has really jammed us — brisk business and low inventory,” one dealer wrote in the Pulse Report, conducted monthly by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only.
Dealer sentiment leapt for the second month in a row; sentiment on current conditions jumped to 89 from 76 in May. Those are vast gains over prior months. The outlook on current conditions went to 76 in May from just 19 in April. And the three- to five-year outlook, which has remained relatively steady during the pandemic, improved to 71 from 64 in May.
Strong trends in May accelerated into June, and both are key months for boat sales, according to the report. “Marine stocks have rallied from March lows as surprisingly strong demand outpaces supply, flipping the industry from a destocking to a restocking environment, the best time to own the space,” the Pulse Report states.
Many respondents reported increased demand from first-time buyers who are new to boating. “Unit sales are up 100 percent over Q2 2019, with increased margins,” one dealer said. “We learned how to sell boats with our showrooms on lockdown. The Internet has arrived. It will change the way we sell boats going forward.”
Another dealer stated: “Pent-up demand is creating sales of units in stock, especially in the powerboat market. This is significant, as people are turning to boating for an escape from the pandemic. It’s obvious, and those with inventory are taking advantage.”
Some dealers said they were forced to turn away customers because they had so little inventory. “Everything is selling, almost no matter the price,” one respondent said. Another said, “New-boat deliveries are delayed several months. Shortages of product in boats and parts/accessories are hurting sales.”
Yet another dealer said that inventory had seemed too high in February, but by June there wasn’t enough to sell to customers. “Manufacturers will be hard-pressed in the immediate future to keep up with the demand,” he said. “I have been in the marine business for 46 years and have never seen the sales increase like it has recently. Being in business this long, we have a great relationship with other dealers with similar product and have been able to purchase boats from them.”
The pandemic has boosted interest in all water activities, he added. “We also have seen an increase in first-time boat buyers, which will help in repeat sales. Also, it is great to walk in a local tackle store and see fathers and mothers with their young kids purchasing fishing rods and related equipment to spend time together as a family.”
This article originally appeared in the August 2020 issue.
