Regional Retail Reports: West, Midwest putter along

We’ve launched a new SNEWS regular feature — Regional Reports — designed to help the outdoor industry maintain a feel for what is affecting sales and the overall outdoor market in different regions around the country. Our readers have been asking for these reports from us and, as always, we try to deliver.

In this second report, we will bring you glimpses into various regional markets through the eyes of outdoor retailers. As we promise with our annual SNEWS Retailer Survey, we will not release the names of those who agree to speak openly and honestly with us. The retailers who have agreed to contribute to our regional reports research on a quarterly basis are key retailers in each region.

This week, we bring you a look at the retail climate in the Midwest, West Mountain, and West Pacific regions of the United States. As always, we appreciate your feedback and commentary, as well as welcome emails to: regionalreports@snewsnet.com.

Midwest
(Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas)

In the Midwest, getting a read on retailer sales numbers for the last quarter in 2003 was like playing darts blindfolded. In some regions, competition shutting down helped to boost the sales of a few others. However, for the most part, it was a weather-driven quarter. While some states did garner early snow, temperatures for the most part remained too warm to inspire a surge in sales — even if snow were falling. In general, October and November were either down a few percentage points when compared to the same period in 2002, or flat. December was a recovery month for almost every retailer with whom we spoke – a month that pulled poor sales for the quarter into the respectable range. Minnesota and Wisconsin appeared to be the anomaly, thanks to snow. Last year featured no snow; this year, lots of it early on, and that drove sales numbers up for nearly every retailer we spoke with in both states.

Things have slowed down dramatically for everyone, although as January draws to a close, most every retailer expects to be flat or down for the first quarter, although remaining hopeful to finish up a few points. Weather will be the deciding factor as the economy no longer appears to be dramatically influencing whether consumers buy or not. IF January finishes with a bang and early February has good snow and cold weather too, things will bode well. If not, January sales have been so bad to this point that the Midwestern retailers will be thinking about sales this spring sooner than they might otherwise.

As for what folks were asking for when they walked in the doors, snowshoe sales arose from the dead — thanks to snow when it counted — with Atlas garnering the most mentions. In most of the region, 2003 marked the first year “soft shell” actually meant something to consumers and, as a result, higher-end soft shells, such as Arc’Teryx and Mountain Hardwear, were frequently mentioned as strong sellers. In general, down vests and wool socks flew off the shelves. The North Face appears to have turned around its delivery issues satisfactorily for retailers to be blowing the product out the door. And, mirroring what our regional report last week focusing on Eastern retailers revealed, the hot pink Denali jacket from The North Face was a red-hot commodity in the Midwest as well, especially in college towns. Sigh.

Recreational cross-country skis did well for those retailers that had early snow — Minnesota, Michigan and Wisconsin, and not so well for everyone else. Telemark, while plugging along, is doing just that — neither dropping off, nor increasing in sales numbers. High end racing skis, boots, and poles simply didn’t sell much at all

In the left-for-dead category, high-end storm shells as well as packs, tents and sleeping bags barely registered a blip on sales register receipts. Surprisingly, sales of flannel shirts and wool pants, typically a staple product for many stores in the region, tailed off dramatically. Retailers were left scratching their heads wondering why. Perhaps someone finally realized that you can buy too much flannel. Could “Queer Eye for the Straight Guy” be striking a fashion cord in the Midwest? Naah….

West Mountain
(Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, and Nevada)

Early snow and cold weather that hammered the West in late October and early November helped to light a fire under consumers and get them thinking about buying gear for skiing and winter play. With the exception of southwestern Colorado, Arizona and New Mexico, retailers in the West realized fourth quarter sales increases over 2002 by an average of 10 percent, and that has left many with relieved smiles. Much of the increases can be attributed to a very poor showing in 2002, so this quarter’s report isn’t cause for celebration just yet. As in the Midwest, the economy does not appear to be affecting the consumer mood much anymore, and that is a good thing.

No different than any other region we have reported on, the West region retailers remain optimistic that the first quarter in 2004 will see sales increases up to 5 percent over the same quarter in 2003. However, whether or not that will be realized depends almost entirely on the weather and IF the region gets good snow in late January and the first few weeks of February.

In the Western region, it does appear as if consumers were ready to pay for technology; sales of high-end soft shells, randonnee and AT ski gear, backcountry ski boots and bindings, and LED lights were red hot. Down jackets and wool socks also kept register keys dancing. A majority of the retailers told us they couldn’t get enough Ugg boots to satisfy demand, which is a bitter-sweet report for Deckers. Surprise hot item? The SplashGuard for Nalgene water bottles — see our review in the SNEWS® Product Reviews section if you don’t know what a SplashGuard is. What? No mention of hot pink Denali jackets? Not one? It appears as if hot pink isn’t quite as “hot” west of the Mississippi. 

With very few exceptions – and the resort towns represented the majority of those exceptions – high-end sweaters, no matter how beautiful, simply didn’t sell this year despite a history of strong past sweater sales during the holiday period. No reason was given. Retailers couldn’t give away high-end storm shells for the most part either.

West Pacific
(Washington, Oregon, California)

In the West, the farther you went up the coast from the Mexican border, the better sales became, which seemed to be representative in large part of the weather patterns which hammered Washington, Oregon and Northern California in November with early snow and lots of snow.

As with the rest of the country, the economy wasn’t the limiting factor in controlling consumer spending. Sales were directly affected by weather and environmental conditions. October sales were flat or slightly up for most retailers in the region. In Washington and Oregon, sales jumped an average of 15 percent for November and as much as 25 percent for December. Northern California retailers realized sales increases that were much more modest, but still up. For Southern California retailers, weather and fires kept a lid on sales with most reporting sales either flat or slightly down for the period.

January has not been as kind for retailers in California, as the storm belt keeps pushing weather north into Oregon and Washington, where weather in the two Northwest states keeps consumers thinking of skiing and winter gear. In Oregon and Washington, retailers tell us they are expecting to build on a decent January and, if the weather cooperates, they should be up an average of 10 percent. California retailers expect to be flat to slightly up, once again. Considering that the first quarter of 2003 was so awful for most retailers in the Pacific region last year, seeing sales increases means retailers are just beginning to recover.

Hot items for the last quarter of 2003 were much the same as the ones mentioned above in the West region report. Brands most often mentioned as strong sellers were The North Face, Arc’Teryx, Cloudveil, SmartWool, and Mountain Hardwear. Interestingly, sweaters up to $80 sold well for retailers in California and Oregon, but retailers in Washington reported that while sweaters were traditionally strong sellers for them, even with a gorgeous lineup this year, sweaters are still sitting unsold on shelves.