Why Is U.S. Outdoor Retail Off to A Rocky Start This Year While Canadian Outdoor Retailers Thrive?
The Canadian population is spread out over a vast amount of beautiful territory, with the majority of that population living in only a handful of major cities – that leaves a ton of space to explore. According to the Director of Sports for market-research firm NPD Group, Matt Teeple, nearly half of Canadians identify as outdoorsy. Moneris reports that consumer spending in Canada grew by 4.77 percent in the third quarter of 2016, with a 7.8 percent rise on sporting equipment alone. While the definition of “outdoorsy” may vary by consumer, the fact of the matter is that the Canadian outdoor equipment market is booming, and brands and retailers are not only taking notice but benefiting from this as well.
Mountain Equipment Co-Op (MEC) is one of the biggest names in the Canadian outdoor retail market and they have enjoyed incredible growth since diversifying their product base. The company currently operates 21 stores and plans to open more by 2019. MEC is also dedicated to making a positive environmental impact through their “1% for the Planet Commitment” which gave back $3.4 million CAD in 2015. The company’s ethos of transparent member involvement, high quality products, and omnichannel service have made it a veritable revenue generating machine and role model for other companies.
SAIL has also had an incredible run in the Canadian outdoor retail industry. Dubbed “The Outdoor Superstore,” the company has been in operation for 40 years and boasts 10 stores between Ontario and Quebec with an 11th opening later this year. According to their website, SAIL has over 500,000 items in each of its stores. While the sheer size of the SAIL stores may give the retailer a leg up on its competition, it’s important that the company approaches plans for expansion wisely, as each store opening is a huge undertaking and presents a large risk. However, with the trends in the marketplace being what they are, it’s safe to say that, much like its largest competitor MEC, SAIL will continue to grow.
If these two Canadian companies prove anything, it’s that the Canadian outdoor equipment marketplace is a hot ticket. While retailers in other industries are shuttering their stores due to lackluster sales and cold markets, retailers in the sports and outdoors space are expanding. Not surprisingly, the promising numbers in Canada have companies south of the border taking notice. The U.S. has had a shaky go in the outdoor equipment market – from behemoths like Sport Chalet and The Sports Authority going bankrupt, to the increasingly warm weather having a negative impact.
The NDP Group also reports that dollar sales in the U.S. declined to the low single-digits. The last three months being particularly difficult, with sales down in the low double-digits. The biggest reason for this may be the shift in the mindset of outdoor enthusiasts, as consumers move away from specific, activity-driven purchases, towards more “lifestyle” buying habits. Consumers are becoming healthier and more active in general and want every aspect of their lives to reflect that, so retailers must expand their assortments and offer more. While Canadian companies like MEC and SAIL have already jumped on board and embraced this change in consumer purchasing behavior, it will be interesting to see how U.S. retailers will adapt and revamp their approach.
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