Last Updated on August 15, 2023 by Robert C. Hoopes
Title: Durango’s Sporting Goods Stores Brace for Competition as REI Enters the Market
Durango, being a hub for outdoor enthusiasts, has long enjoyed a flourishing retail sector catering to sporting goods. In 2022 alone, these stores pulled in an impressive $23 million in sales tax revenue, highlighting the region’s strong consumer demand. However, this thriving market has caught the attention of big-name retailers like Recreation Equipment Inc. (REI), who plans to establish its presence in the city. The expected entry of REI has triggered a mix of excitement and concern among local business owners.
Over the past decade, Durango’s population has grown by an impressive 12.9%. This increase presents opportunities for well-known brands like REI to tap into a larger customer base. Despite having more than 10 locally owned outdoor retail stores, some store owners remain confident in the reputation they have built and are undeterred by REI’s impending arrival. These businesses have garnered loyal customers by providing exceptional customer service and leveraging their specialized knowledge of the area.
However, in an effort to compete with REI’s robust offerings, some local retailers are expanding their customer service options. This includes introducing online consultations and selling products online, enhancing convenience for customers who may be lured by the convenience of REI’s physical store. Additionally, the discounts that REI typically offers, especially during the holiday season, may strain local retailers who cannot match these markdowns.
While the impact of REI’s entry is yet to be fully determined, local retailers anticipate a slight drop-off in sales, particularly in categories such as basic camping gear and footwear. REI’s history suggests it typically claims about 20% of the market share in its first year of operation. This projection indicates that, if Durango’s sporting goods stores were to replicate their 2022 revenue in 2025, REI could potentially capture around $4.6 million in its first full year.
One aspect of REI that initially seems advantageous to the local community is the company’s investment in local nonprofits. However, some business owners remain skeptical about the long-term benefits of this philanthropy. Additionally, concerns have been raised about the necessity of constructing a new building for REI, further exacerbating tensions between the national retailer and local businesses.
One pressing issue facing smaller outdoor retailers in Durango is their inability to match REI’s prices due to differences in buying power and volume. This discrepancy frustrates many local businesses, who rely on their unique selling points, such as customer service and comprehensive knowledge of the region, to differentiate themselves from national chains.
As Durango braces itself for the arrival of REI in 2025, the local sporting goods industry finds itself at a critical crossroad. Maintaining a loyal customer base and emphasizing the personalized experience offered through their independent operations will prove crucial in keeping the local retail sector prosperous amid rising competition. Only time will tell whether the balance will shift in favor of the established local businesses or REI’s well-established presence will firmly take hold.