Big disappointment at REI brick-and-mortar store today

Covid-19 did a number on REI!

A LOT has changed at REI stores and online since March 2020 but I think these changes were several years in the making.

In many instances, REI (and all other retailers) are a victim of production or delivery issues from the manufacturers. MSR makes some items of gear in the US but their production has been a fraction of normal. This has hit REI hard.

I was looking for a few different pieces of gear at REI and found that they were not even listed on the REI website. I called MSR (the manufacturer) and they said that gear that was normally carried by REI was no longer listed for purchase on the REI website if the item(s) were not in stock. In the past the site would list them but show them as out of stock or backordered.

The more interesting change I’ve seen is in the staff at the couple of REI stores I normally visit: virtually ALL of the long-term staff are gone! They’ve been replaced by highly inexperienced and not knowledgeable new employees. When I visited the store after it reopened after the initial Covid shutdown, all the familiar faces were gone.

It might be a decision by REI to replace the “expensive” employees with cheaper Mcemployees or it could be something else. But REI itself has morphed from being an “outdoor” gear store to simply a “fashion” clothing store catering to a different lifestyle segment: it is a larger market but then REI becomes yet another Target/Walmart/etc about to be crushed by Amazon etc. Clearly Amazon has been eating into REI sales for many years already.

I guess REI decided to stop swimming against the tide – can’t blame them.

I haven’t really bought much from them except trail running shoes or bike helmets etc in recent years. Most of my gear has come from cottage makers (via BPL Gear Swap!).

REI did choose to walk away from their fancy new headquarters buildings last year; maybe they’ll start shutting down stores as well.

REI sold their unused HQ to Facebook at a profit.

And they recently announced a new store less than five miles from my house as the crow flies. Remodeling is underway for that old Toys-R-Us (and Best Buy before that.) Will be REI store #11 within a 2-hour drive.

Like @pedestrian, I don’t buy much at REI these days except consumables like shoes and fuel. After wandering around for a relatively short 30 minutes today, mostly because I couldn’t find randomly-placed items or actually, you know, hold and feel and try on anything interesting, I left with hiking socks and a chocolate bar. Still have some $$ left on my small dividend.

Too bad. For many old-timers, infrequent trips to far fewer REI stores were special events that always turned up something interesting and useful for backpacking or climbing.

Now it’s Yet Another Big Box Store, under a different name.

— Rex

At times I think the store near me is starting to look and feel like Eastern Mtn Sports a year before it folded up. Low stock and inexperienced employees outnumber the small handful of vets. My last two shoe purchases resulted in them telling me to order online, so I do that now since the guidance in the store is questionable. I’ve been a member for years, but this year is the first time I’ve returned items that they said “order online” and they didn’t fit or work out. I’ve just factored the possibility of returning the item as part of the buying experience.

Shoes, fuel canisters and the occasional piece of clothing. That’s all I go there for anymore.

Shoes, clothing, consumables and stuff like hiking poles are what I use them for mostly.  I’ll get some decent dividends that go into more footwear mostly.

I saw some pretty depleted stores last year but also seen some “restocked” recently.  Currently enroute  to a couple wks of hiking, so went by the Burbank REI today (Los Angeles area as the drought indicator is bad except for SoCal where it merely drier) to spend said dividend and get 20% off as my hiking shoes had a hole not repairable.  It was pretty well stocked, just yr not going to find much in terms of UL-lightwt gear.

Read where their business model is pretty much changed, some of their in house brand isn’t good, etc.. (while some is good enuf), but I’ll alway get the name brand stuff so not really my problem.

(well mostly name brand as Walmart’s house brand soccer shorts are I’m hiking in – bought some repair tape too “coincidentally”).

As a long-term REI employee, I have had a front row seat to many of the changes folks are experiencing.  Covid hit the outdoor gear industry HARD, and it’s going to take awhile to get back to what most of us are used to.  Many things are factoring into this:  shortages of raw materials to make stuff, factories all over the world running below capacity or shut down totally for a period of time, and problems with with getting product to markets.  The entire supply chain took a giant hit.  Compound that with the huge increase in people at home shopping on the internet, not able to take trips abroad or even across the country, and deciding to go camping and gearing up for those new-to-many adventures.  There you have it, the proverbial perfect storm and why you don’t see what you want.  My own searches for things I can’t find at REI have proven that REI is not alone in their lack of many SKU’s.  I can assure you that it is very frustrating from the sales end of things when people take the time to come into a store and we don’t have exactly what they came for.

Most of my coworkers are still employed.  Some left for a number of different reasons:  to be closer to family in uncertain times, found other employment that they kept after our furlough ended, and some decided not to risk working with the public in a retail environment with so many uncertainties around the virus.  I’m sure some stores had more turnover than others, but there sure wasn’t a company wide campaign to get rid of more experienced employees.  I am proof of that.

This remains a good time to be flexible and plan ahead, not wait until the last minute to get something you need.  It will probably be that way for awhile yet.  I for one am very grateful to have plenty of toilet paper and access to food at the grocery store…gear is optional (but still very important!).

Regarding long term REI employees being “gone” and replaced by new faces: many of the long-term employees are older and at higher risk for Covid-19. Many of them are also retired from other professions, or have another gig that pays better, or a spouse that makes more at another job/pension etc…so they don’t really need the work, they do it because they enjoy it, for a bit of extra income, and for the discounts & prodeals which can be substantial. Covid-19 changed that calculation for many, who either quit, or took a leave of absence in an effort to reduce their exposure at work and protect their health and that of their loved ones.  Newer, younger employees tend not to worry about Covid as much and are happy to take their jobs for minimum wage + discounts. REI has high turnover in normal times like most retail businesses – they tend to hire a new crop of employees in each store 3-4 times a year most years, and many of them stay less than a year. What changed with Covid is a significant percentage of the older/long time employees decided they weren’t willing to risk their life/health or that of a loved one for a low paying retail job. And some store managers likely used it as an opportunity to get rid of some of the more crusty/stubborn/set in their ways employees who drove up payroll and maybe resisted some of the constant changes/initiatives that come and go in retail all the time with each new manager who wants to make their mark.

Meanwhile, once stores reopened, many customers stayed home or ordered online for curbside pickup. On top of this, stores had to restrict the # of customers to a fraction of capacity, which means in store sales numbers went down a lot, and they needed fewer employees on the floor. Old timers are paid more than new hires, sometimes substantially more. So in some stores the bean counters decided to let a bunch of old timers go to save money on payroll.

At the same time, supply chain issues caused major inventory shortages which also reduced sales. Online sales made up for a lot of this but that doesn’t pay for employees on the floor so payroll gets cut.

Lots of long time customers haven’t gone into the stores nearly as much as they used to. The ones that do come in are disproportionately not concerned about covid, not compliant with wearing masks and distancing, etc. This results in lower sales, lower payroll, lower inventory, unhappy and stressed out employees, managers, etc. Given limited inventory, REI has to send their limited inventory to wherever the algorithm decides it is most needed or most profitable, and it may not be your local store.

REI also figured out a long time ago that each new member spends something like $1500-$2000 in their first year of membership, and it then drops off significantly after that, once they are all geared up for their new hobby, and discover they can comparison shop and read reviews online instead of relying on random REI employees for advice. As a result they decided to focus heavily on acquiring new members (who tend to be young and new to camping/backpacking/etc) as that’s where a large chunk of their revenue comes from.  The $20 membership fee from each new member is also pure profit and contributes a lot to the bottom line, as do all the dividends that are never spent and expire after 2 years.

The BPL membership average demographics are likely very different from the REI membership average demographics – while many if not most BPLers are REI members, they are not spending nearly as much on average at REI as REI’s newer, younger members are in their first 1-2 years. They already have a lot of gear and tend to upgrade to UL/Cottage stuff that REI may not carry. As noted above they may buy consumables at REI since it is convenient, but the big purchases are already made or made elsewhere in many cases.

If you are reading this, you are not REI’s target demographic. They would love to keep you as a customer, but their focus is elsewhere.

And somehow I thought that REI was a cooperative, run by and for all of its members. Even says something like that on the home page right now:

Instead it is becoming almost indistinguishable from many other shareholder-is-king corporations, in multiple dimensions. Further ranting deleted.

— Rex

Actually you did not get a 2020 dividend. From the REI website and also in communications to R.E.I. members  . . .

Since we didn’t earn a profit in 2020, we don’t have those profits to provide to members in the form of a dividend. Even though we didn’t make a profit last year, you’ll receive a member reward equivalent to what your dividend would have been: 10 percent back on your eligible full-price purchases in 2020.

I appreciated the member reward even though it wasn’t a dividend this year. I can only imagine the difficulties they’ve had over the past year. I don’t want to see them go the way of MEC. It’s a different set of economics vs something like Dicks. They have to make enough money to stay in business especially with much more online competition  but at least they aren’t saddled with multi million dollar executive salaries and quarterly driven behavior.

In 2019, REI CEO compensation was $3.284 Million, and 3 other executives made over $1 million. They did take big pay cuts in 2020 but it will likely go right back up in 2021. They do have a more long term planning mindset than many publicly owned (or hedge fund owned) corporations which has helped keep them thriving and surviving, and will likely continue to do so for years to come.

REI executive compensation report for 2019: https://www.rei.com/assets/about-rei/executive-compensation/rei_executive-compensation_cda-for-2018-results/live.pdf

Rex was this the Santa Barbara REI? I would have thought it survived better than most stores since the trails were crowded during COVID, I often had to wait in line to get in and on Sunday I found exactly what I was looking for when I went there: Fuel and hot lips. Granted they had a lot less fuel than they used to, but they had it.

But REI itself has morphed from being an “outdoor” gear store to simply a “fashion” clothing store catering to a different lifestyle segment…

That’s my local store, perfectly described.  I stopped shopping there when they stopped carrying even the most basic items that I needed, and when the parking lot started to be permanently crowded; I would rather scrimp and save and buy from cottage builders than fight a crowd, only to be frustrated and go home empty-handed.

That said: I accompanied someone to the local branch of the temple just this past weekend on a mission to find a daypack.  While my companion shopped I remained outside taking in some sunshine and counting M-Sport and WRX packages, and when she walked back out I asked if she’d been successful in finding what she was looking for.  Her response was telling: an irritated shake of the head and a quick “All they have is clothing and Yeti cups, anymore.”

That is sad – I usually have no trouble finding what I need at the local REI. That being said, I shop shoes, gas canisters and the occasional gift item (bought a simple headlamp for my dad this year), so my needs are not great. I do admit I’ll typically shop REI online first if possible, and ship to the store only if I need to get something else I can’t have delivered to my house. I only go to the store if I need something last minute that I know I can get (i.e. forgot my trekking poles at home one trip to the Sierras, so I had to stop at an REI on the way to pick up a spare set).

I still like REI. Their in store selection at my local one is 50/50 hit or miss. I buy specific or less-common gear from them most of the time, so dont expect to find exactly what I need in store.

Now, pretty much every time I will shop ahead on REI.com. I float between a medium and large so typically order both, have the stuff shipped to store, then return the wrong size on the spot. Or since covid closed the changing rooms I’ll take it out to my car, try on the stuff, then return the wrong one. I try to avoid 2-way shipping (returns) if possible.

I could do the same thing with amazon or bakcountry, but genuinely like REI and would like them to stick around in physical form.

Even though they’re maybe not as hard-core outdoors as they once were, they’re still the best commercial outdoor retailer around. I do agree, who the &@% buys all those overpriced Yeti cups and hydroflasks?

It would be cool if they stocked some cottage or semi-cottage gear along the lines of gossamer gear or Zpacks. Although they’re not quite ‘cottage’, they probably have the manufacturing capacity to supply a national chain like REI.

Not to be a contrarian, but I was in the local REI in San Luis Obispo yesterday and had a great experience. The salesperson I worked with had recently completed 3/4 of the PCT and provided great information in helping me work through the very difficult gear problem of replacing my beloved but decaying Arc Blast with a new pack with a higher carrying capacity. I can’t imagine working with a more knowledgeable and relatable person for backpacking gear. I will always be buying a lot of my gear online and at our local backpacking store than has been in town for decades. I’m sure that somebody like me who usually has a base weight of 10# or less is not their target demographic, but I’ve only found one such store in California. Supply chain issues resulting from COVID are what they are. I’m just happy to be getting out and into a great store that I enjoy.

who the &@% buys all those overpriced Yeti cups and hydroflasks?

My dad bought me one for a christmas present a few years ago – I’ll likely die before it wears out. I’m not complaining :) I’d not likely spend that much on myself though, the Walmart brand knock-offs work well enough for me. As it is, I have to let my coffee sit in the Yeti for like 2hr before it is cool enough to drink!

Not to be a contrarian, but I was in the local REI in San Luis Obispo yesterday and had a great experience.

The SLO store is my local store, and I agree that they seem to be doing good. But I don’t make a habit of buying big items from them as I am addicted to MYOG.

Its the way these days. They haven’t carried maps of the local area for years. You can find guide books for National Parks thousands of miles distant. Their clothes are pretty shapeless. REI likes imported goods cause they are cheap, won’t do business with companies that supply hunting gear or otherwise doesn’t meet their definition of woke,  and doesn’t like ultralight gear that might be easily misused and become a warranty issue.

I used to find unusual things suitable for backpacking at Cabela’s too. Some of their own brand stuff was close to cutting edge for backcountry use, occasionally more so than REI. Then they were bought by BassPro and Covid happened and now its just truck floor mats and cheap Chinese clothes for sedentary people. Most with huge garish logos and homely camouflage trim. I feel sorry for the little boy named Cabela at the swimming hole last summer who’s Dad kept hollering at him. Wonder if there are any youngsters out there named REI?

Amazon has done in the mom and pop specialty stores. But now the specialty items Bezos the jobber once sold are disappearing there as well.

Be interesting to see what is next.

My REI experience is still largely positive — local maps, nice people, etc. Sure is nice to have an actual store to visit instead of more scrolling in my life. Naturally, REI offerings have morphed over the years and broadened to stay financially viable. If they only carried my ultralight preferences they probably would have gone under years ago. There’s just not enough ounce counters out there.

Turning into another Walmart or Target? I don’t think so, but they are trying to manage brick and mortar along with online like those two.

In general, we are trying to emerge from a worldwide pandemic so let’s give it some time before we vote them off the island and are left with only online options.

Doesn’t REI carry Yeti ? That is primarily a sportsperson brand.

It’s hard to do retail without being made overseas due to the multiplying margins and everyone needed to make some money in the process.

I still like to stop by the local REI stores and will gladly give them my business!

It’s just that I don’t need or even want much of most of what they carry – mostly because I have most of what I need already.

Interesting to hear from REI employees: it does corroborate what I’ve observed over the years.

Clearly REI have to make decisions based on what’s best for their business.

I have no problem with any retailer that chooses to carry gear made “overseas” (read China). US suppliers are welcome to step up and compete! Clearly many still do an amazing job: Seekoutside is a great example!

As an economy the US has made decisions to essentially kill domestic manufacturing over the decades starting in the late 1970s. Can that be reversed? Yes of course if there’s investment in capital, equipment, people, and time. But it’s much easier for all concerned to wring their hands, shed false tears and make snide remarks about the “inferiority” of “overseas” (read Chinese) goods.

Did you pick up any yoga pants, Rex?  ;-)

But it’s much easier for all concerned to wring their hands, shed false tears and make snide remarks about the “inferiority” of “overseas” (read Chinese) goods.

What about the situations when those goods really are inferior?  One of my biggest reasons for switching to smaller cottage builders was the higher quality; I like supporting small business, but the overall quality improvement from moving to cottage-built gear – and the vastly-superior customer service experience – has been significant.  Also, what about the tacit support of questionable employment and management practices that are still rampant in China?  Sure, some companies are stepping up and increasing oversight on workplace conditions – and seeing the resultant price increases – but others aren’t.  I don’t see many crocodiles crying over that particular point; usually, I see it getting swept under the rug when it comes time for someone to couple expostulation with action.

Nick: I noticed the change in wording about the “dividend” this year and feared it was another change in their corporate structure or governance.

Remember when a member could self-nominate to stand for election to the board?  Now it’s only nominees selected by the existing board and only for the number of open seats so all BOD elections are non-competitive.  While they certainly seem to attract and select board members who are much more qualified business people than most members, I suspect it’s one big reason they’ve left behind the climber/backpacker-centric practices:

– human-powered sports. How is a Yakima car roof rack “human-powered” much less downhill skiing?  99.74% of Alpine skiing requires $67 million of powered ski lifts, grooming, snow-making, etc.   $6,000 electric bikes?

– weights listed on EVERYTHING.  Their catalogs used to do that.  No more.

A cooperative has to be democratically governed (and return patronage dividends) to maintain its not-for-profit tax status and I suspect they might lose a legal challenge since they’ve eliminated ANY possibility of governance by the members, but who’s going to fight/fund that court case?

I could care less about business practices in other countries – impossible for any one to police other countries or even tell them what to do or how to run their affairs. You don’t like what they do, don’t do business with them!

The other important piece: if corporate America really wants to compete with better products at reasonable prices, the opportunity clearly exists.

It’s not just outdoor consumer goods: everything from electronics to chips to chemicals – you name it and the US is essentially hostage to “overseas” manufacturers. Our manufacturing base has been hollowed out not by anyone else but ourselves!

Whataboutism is not going to solve anything!