David vs. Goliath:sporting good chains vs. bike retailers

A big struggle in Canada now between national sporting goods/equipment chain, Mountain Equipment Co-op and independent LBS/bike retailers & manufacturers. MEC is starting to sell their line of bikes. But smaller LBS, etc. do see MEC like a Walmart, and feel its a threat to their biz, not just bikes, but some accessories, etc.

Over the years in visiting different LBS vs. MEC, for myself, I do still tend to find that women's cycling apparel choices and accessories abit thinner choice at LBS. Hence, I go over to MEC. I check there MEC and if not there, then I go check at LBS'S.

So if you do buy from a store (and I know many here buy online), do you just go to whatever store will give you the greatest choice and best pricing at the right time?

Reading this industry fight is abit painful ..and for certain, draining the energy of independent biz. I'm not totally convinced that in big cities, that MEC with their single line of bikes will be a serious threat.
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Mountain Equipment Co-op raises ire of bicycle industry
David Labistour, CEO of Mountain Equipment Co-op, talk about the new line of bikes designed by the company, now for sale in Toronto. The Globe and Mail
Decision by Vancouver-based non-profit chain to sell bikes criticized by specialty retailers, who fear unfair competition
http://www.theglobeandmail.com/repor...rticle1350204/

Article Comments (96) Marina Strauss

Globe and Mail Update
Published on Tuesday, Nov. 03, 2009 10:00PM EST

Last updated on Wednesday, Nov. 04, 2009 8:05AM EST


Mountain Equipment Co-op, which has built its retailing reputation on a feel-good image of environmental and social responsibility, has ignited anger in an unlikely place – the bicycle industry.

Its foray this month into bike selling has been criticized by rival specialty retailers for everything from unfair competition because of its tax-exempt status, to a Wal-Mart-style money grab, to unethical sourcing.

Bike enthusiasts' ire toward MEC intensified when an executive at the non-profit chain slammed the bike industry in a blog on the company's website, calling it “grey, dusty and dirty.” The blog entry was later removed.

Some bike-parts suppliers have even refused to ship to MEC, while one Quebec distributor last month dropped a major Canadian parts manufacturer from its roster because the supplier is selling to MEC.

“It's no different to me than somebody buying a product at Wal-Mart that they could buy at their local mom-and-pop store,” says Pete Lilly, owner of Sweet Pete's Bike Shop in Toronto and former president of the Bicycle Trade Association of Canada, which represents suppliers and retailers in the estimated $1-billion industry.

“Independent bicycle retail offers something very different than Mountain Equipment Co-op can,” Mr. Lilly says.

“It's moved to a Wal-Mart model but because they've opted to give a small percentage of their money back to green causes, they wrap themselves in this green cloak and appear to everybody to be fair and just and clean and green. For somebody like me, I simply don't buy it.”

MEC started as a co-op in a single store in Vancouver in 1971, but has grown into the country's leading retailer of outdoor sporting goods gear and apparel with 13 big-box stores and annual revenue of about $265-million. It doesn't make a profit, but budgets 3 per cent of sales as surplus for capital funding and gives 1 per cent of sales to environmental initiatives.

It has sold bike parts for years but decided to expand into bikes as part of its mission to get Canadians active in outdoor recreation, chief executive officer David Labistour says. The retailer apologized to the bike industry for its blog comment about the sector being dusty and dirty, and insists its expansion into bikes isn't a money grab.

“There's no legislation anywhere in the world that states that we cannot go into bicycles,” Mr. Labistour said this week. “We went to great lengths to give the industry two years' notice about the fact that we were going into bikes. … The only thing the bike industry has done in the past two years is put all their efforts into shutting us out of the industry.”

The Canadian bike industry can be a volatile one, sensitive to new players stepping into others' territory.

Dorel Industries Inc. faced an uphill climb last year when it entered the exclusive world of high-performance cycling. The company, which makes children's gear and furniture, and was already a major mass market player, wanted to tap into the growing high-end bike segment by purchasing Cannondale Bicycle Corp. of Bethel, Conn.

But in cycling circles, Montreal-based Dorel came under attack for flogging a low-priced line of bikes at Wal-Mart while selling the pricey Cannondale through independent bike dealers. The move would weaken specialty sellers, they said.

The latest biking dustup with MEC is stirring some of the same types of emotions. Last month, after bike accessories supplier Race Face told its retailers that it had decided to stock MEC with its body armour, components and other products, the Canadian distributor of the line promptly ditched it.

The distributor, Cycles Lambert Inc. of Lévis, Que., “is very disappointed with the decision Race Face has made in this matter,” it said in a statement to its retail customers. “Due to Race Face's realignment with MEC, Lambert ceased its business relationship with the company.

“The importance of specialty retailers for Canadian cyclists is undeniable,” Lambert said. “Lambert remains firm in its commitment to channels avoiding an every-day low-price strategy, which brings down reasonable market pricing.”

An executive at Lambert could not be reached, but one industry source said independent retailers had cancelled Race Face bookings worth about $250,000 for the upcoming season.

Mr. Labistour said MEC has tried to be as transparent as possible about its cycling moves. It is facing increasing competition in its core outdoor sporting goods business, and has to find ways to keep co-op membership strong by encouraging outdoor activities.

The bikes, which are priced at $650 to $1,400, are made in Taiwan under MEC's own private label. But MEC has said it will strive to improve conditions in factories that produce its bicycles. It is targeting $4-million of bike sales in its first year.

“We're not going to go away,” Mr. Labistour said.

Not everyone in the cycling sector is anti-MEC. Martin Vellend, co-owner of Vellend Tech Canada in Toronto, said while he is torn over the controversy, he will continue to supply MEC with biking footwear.

“It's a little bit of a dilemma,” Mr. Vellend said. “But they're a customer and a good customer, and they pay their bills and put their orders in on time.”

Buying local is my first choice. But there some items I only go mail order because I know I can't find them in shops. Mostly clothes-I am tall and fat. Yeah, I know, if we ask nicely the shops might consider stocking a bigger size range. But I have been asking nicely since I was a tall and skinny 12 year old, and I'm 47 now, and even I run out of patience eventually.

My favorite bike shop, the one that sold me my bike, is quite small and has a limited selection of accessories. So I will check with them first, but often end up going to performance bike or REI.

The one big box I gladly patronize is Costco. Unlike other retailers, Costco is famous for treating its employees very well, with higher wages and benefits. The CEO comes under fire from shareholders that want him to reduce wages/increase profits, but he is standing firm. And it started in my hometown. Kirkland Select is named for the town of Kirkland, Washington.

The big chains I will never go to because of the way they treat their employees: Sam's Club, which is Walmart in disguise, and Whole Foods

It's important to note that to this day MEC remains a cooperative. It offers good working conditions to its employees and generally works hard to conduct business ethically. Items there are priced fairly, not cheaply.

Unlike REI, you HAVE to be a MEC member to buy at MEC. ($5 share)

When MEC polled its members, I indicated that I was strongly against having them carrying bikes, primarily because I do think it will hurt the local retailers. However, I'm starting to change my mind, and I find the recent communications of the Canadian bad industry to be in bad faith, especially with regards to cycling accessories. Most widely available non-MEC products, unfortunately, are very poor design and quality compared to what MEC offers, and MEC's price point is very reasonable. The comparison to Wal-Mart kills their point in my opinion: seriously comparing MEC to Wal-mart?? Who do they think they are kidding?

When I shop for a touring bike in the coming months, I will seriously consider MEC bikes, although at first glance I don't think they'll fit the bill of what I'm looking for. But I'm really hoping that a chunk of the business will move from real big-box stores (like Walmart) to MEC. I don't think it's the LBS's business that will suffer.

Off my soapbox.

I like really nice bikes and I like my really nice bikes to run really well.

Sporting goods stores provide me neither of those things. Ok, so REI does carry Cannondale and Ellsworth, but not in many stores or in any great quantities. Also precious precious few have good mechanics.

My LBS provides both. High end bikes and extremely high end mechanics.

So, I want my LBS to be there when I want that bike or I need service. Thus, I will go out of my way to purchase other things from them, including having them order things I could walk into REI and pick up. This does not typically include clothes that I want to try on/see/feel first and that I typically only by at steep discounts.

This would NOT be the case if my LBS did not try to be reasonably competitive with pricing. Typically I find that they are not much (if any) more expensive than internet retailers or REI unless one of the later has NOS or unpackaged manufacturer stock at an insane discount.

REI does get more than it's fair share of my money for other things, and no, I don't set foot in sporting stores like ****'s or Sports Authority often, if ever.

I also think there is a place for outdoor or sporting stores to carry bikes. For the most part the bikes are better than Walmart bike shaped objects, and to some extent they fill the gap between those at $65 and LBS bikes at $350 with a little overlap (more overlap in REI's case).

We love our LBS. Very friendly. There are two another high-end shops in town but they treat us suburbanites like outsiders as they cater to a particular part of town.

Unfortunately our favorite shop does not merchandise well and does not carry the bike my hubby is drooling over at the moment. He is working up the nerve to go grovel at the other shop. I think he should stick with the favorite LBS and get the bike with less snob appeal.

I keep reminding him that I drive a VW GTI because I don't need the name but I want the fun. More bang for the buck! He still hasn't forgiven me for not going for the BMW name plate. I love my bad little Rabbit. I smile every time I spy it in a parking lot.

We have purchased multiple bikes from all three LBS's. Our last two from our favorite LBS this year. We bought one on ebay. I don't think we have purchased any bike related items from a local big box. We do quite a bit of mail-order though. Mainly because of the poor selection of accessories at our favorite LBS. We also live in the country and on-line shopping it more convenient. (Our UPS guy is as friendly as the bike shop)

But I have to say, the nice people at our favorite shop are worth paying a little extra when they have the item we need. Plus we have to support them so that they will someday move into a bigger building!