Cabela’s Massive Outdoor Superstores Are Only Providing Competition To Each Other

Cabela’s Massive Outdoor Superstores Are Only Providing Competition To Each Other

Outdoor and recreation retailer Cabela’s says that it has overestimated the necessity of brick and mortar business of its class. In the niche market, the outdoors supercenter is turning into one of its biggest sources of competition.

While Cabela’s has reported that for the most recent quarter it experienced a 4.6% increase in revenue, this is not too impressive when one considers that the company opened ten new stores during this time period.

Indeed, sales at stores that have been opened for more than a year fell by 4.2%, as profit declined by 19%.

Some analysts say that cannibalization has taken over Cabela’s, as their new stores have been luring customers away from other Cabela’s locations rather than the stores of their competitors.

While Cabela’s is somewhat of a specialty retailer, many market analysts believe that the company should start to shift its focus to online retailing in order to stay competitive. It would also clear up floor space from all of the taxidermied animals.

Physical retail stores can be particularly successful and bring in many customers for a company. One such company is Apple, as people love to visit locations of the technology giant in order to see the company’s latest innovations. And the longer that they spend time in one of these stores, the more likely they are to spend money.

Cabela’s wants desperately to fit into this category. It claims that its stores are comparable to a “tourist-type of experience”. Stores contain museums, shooting galleries and even dog-sitting services. It all means that Cabela’s needs massive amounts of inventory that it might not be able to sell.

In the meantime, Cabela’s plans to slow down its schedule of expansion. The retailer plans to open seven new stores in 2016, and it does not have any plans to open any more the year after that.

Cabela’s currently has 74 stores in North America. The company has the long term goal of operating 225 such locations.

Cabela’s is also buying back stock, while its shares were on sale at a 15% discount this morning.

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