Is the golf pro being frozen out?
For many experienced club pros, this winter has been as bad as any in living memory, a perfect storm of poor weather and worrying economic headlines. And this spring could deliver further gloomy news; March and April are when the majority of club memberships are renewed, and it is then that we'll see how far the golf economy has been hit by the banking crisis. There is a real chance that subs will fall dramatically as concerns about unemployment, mortgage repossessions and future interest-rate rises erode our confidence in the future.
"Golf clubs generally are under pressure and therefore, clearly the golf professional is going to be under pressure," says Kyle Philpotts, director of training and education at the PGA. "People are making a decision in terms of whether golf is something they can actually afford anymore."
The job of the club golf pro is often misunderstood, even among their own club members who recall a time when the pro enjoyed a virtual monopoly in the market for selling golf equipment. That time has gone forever as the growth of the golf superstores energised the market a decade ago, and now the internet has further eroded the ‘Green Grass' stranglehold.
Most pros are paid a retainer by their clubs, the value of which varies depending on experience and the nature of the deal. Some are paid a straight fee, often on a three-month rolling contract. For this they run the shop, take the green fees and provide lessons for the members. Others take a cut of the green fee income, depending on the size of the club and the cost of a round.
An experienced pro can expect a retainer of between £15,000 and £20,000 a year. This is not income however, as it contributes to the cost of running the shop. Given a fully stocked shop can cost in the region of £40,000 a year to keep open, the retainer contributes to around half of the overhead. In addition to buying in stock, the shop must be manned by assistants in order to give the pro the freedom to augment his salary with teaching fees, which can represent around a third to half of the total, depending on their location, aptitude and demand.
However, as the economy bites, these revenue streams are drying up. According to some pros we talked to, some smaller clubs are cutting the retainers offered to pros or even questioning whether they need one at all. The weather has hit the shop trade hard, too, and one pro reported that not one pound had been taken in his shop for a seven week period over the winter.
To this short term havoc, we can add the long term effect of the internet, which is undermining their core retailing business and cutting profit margins. A £500 set of Callaway irons, for example, may net the pro less than £50: "The big ticket items are a problem for us," said one club pro. "We have to stock them because the members expect to see them and like the idea of coming in a looking around racks of irons. But they don't buy them. Or if they do they want us to price match something they've seen on the internet."
The defence of the pro is to add value to a set of clubs by giving advice on the fit and other details such as loft and shaft type, which best suit the player. But the lure of the web is making that argument hard to sustain as we crave bargains, while the manufacturers themselves are offering custom-fit advice online, further undermining the role of the shopkeepers they have traditionally relied on. The great enemy of any retailer is cash flow, ensuring the stock is turned into money as quickly as possible. In order to stock big name brands such as Callaway, Ping, TaylorMade or Mizuno, the pro commits to stocking a certain number of clubs and other accessories from that brand. Like any retailer, the pro's job is to second guess what his customer will want over the course of the year and make decisions about what equipment to buy from the manufacturers.
It's here that their financial risk is at its greatest. The big manufacturers demand a minimum payment, with some pros we spoke to suggesting this minimum order could be as high as £10k to £15k a year. But if the stock doesn't sell as anticipated, the pro is left to try to make back his initial outlay in an end-of-season sale, where clubs are offered at cost or below. The high turnover of new product also makes keeping up to date a real problem. "I had a the new TaylorMade R9 driver in the shop for the proper retail price of £299, while GolfDirect had the R7 up for £99" said one pro, "it makes us look daft."
The major golf retailers and online stockists are able to carry greater levels of stock, meaning they negotiate better deals. An average pro shop, serving a membership of around 700 members, would expect to take a shoe drop of 50 adidas or Footjoy shoes, compared to several hundred on the high street.
There is little chance of selling off unwanted stock on the internet, via ebay for example. As one pro told me: "If the big club makers see their stuff online they trace it back and can take you off their books, so next year you'll have nothing to sell at all."
To the manufacturers, the internet sites and the major high street retailers is a double edged sword: they value the ability to sell in bulk, but worry about the deterioration in the value of their brand. For this reason, companies such as Ping still invest heavily in supporting green grass outlets, by providing made to measure club services. It's no coincidence, say pros, that the rate of depreciation on a set of Pings is very low by comparison to some of the other leading names.
"Ping were very sharp and you won't see their prices butchered on the internet like you will on some of the others," says Alan White, head pro at Lanark Golf Club, who feels the perception that the internet is better value is a bit of a myth. Many clubs, he says, use golf buying groups, which negotiate better deals from the manufacturers and allow smaller club shops to be more competitive on price. "I offer the service of fitting a member to the club, you don't charge for the club fitting unless they don't buy the clubs, but you sell the club at the Internet price, because that is now the benchmark. That way you can make your fifty quid."
That sort of entrepreneurial flair is now part and parcel of a job that is evolving quickly, leaving some pros we talked to contemplating a decision they have been putting off and seeking a job outside of golf. It's not going too far to say that in some areas of the country particularly, the very existence of the club professional is under threat.
For those clubs in that position, Alan White suggests there is a need to look seriously at whether the club has the resources to support both a pro and a club secretary. "In so many areas these roles overlap," says White. "And it would seem to me that a qualified PGA Professional has a lot more to offer members in the way of golf-related service than a golf club secretary."
Now that really does open up a juicy debate...