What recession? MEC to open 2 new stores in Calgary
Despite the severe recession in Alberta, MEC is opening 2 new stores in Calgary
There is no recession evident at the downtown Calgary MEC on a weekday afternoon in July.
The parking lot is full, two cyclists on their way from Vancouver to South America have stopped by to stock up, parents are buying their children supplies for camp, and there is a sign at the rental area that says there are no sleeping bags left to rent for the coming weekend.
Research has shown that Canadians are not as prone to going into the pure wild anymore.- David Ian Gray, DIG360 Consulting
All this helps to explain why MEC is opening two new stores in Calgary over the next three years, despite a recession in the province that economists are calling the worst in decades.
One location will open on Calgary's western edge, on the way to the mountains, the other in Seton, in the city's deep southern suburbs.
"We've been hearing for years that people really love MEC, but that it's not really accessible," said Jerry McGillivray, western regional manager for the chain.
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MEC has more than 350,000 members in the Calgary area, about half the total in Alberta. The retailer works as a co-operative, in which customers buy a $5 lifetime membership and are entitled to annual profit sharing. That also means the company is able to track every purchase its members make, from climbing chalk, to paddle boards to road bikes.
'We have the advantage in that we know where all of our members live," said McGillivray. "So by having that information, we can really speak to what areas of the country and what areas of specific markets we should be in."
Stores coming in Toronto, Montreal, Edmonton
MEC has been going through a significant expansion in recent years. In 2016, it has already opened a location in Kelowna, B.C., and is opening new stores in Edmonton, Laval, Que., and the Toronto suburb of North York later this year, as well as one in Kitchener, Ont., in 2017.
But Alberta is a retailing risk these days.
"We are very aware of the economic situation, said McGillivray. "If you look at the Alberta retail market, both our MEC locations both in Edmonton and Calgary are faring much better than your typical retailer."
MEC has broadened its offerings in recent years to appeal to a broader customer base than the hard-core backcountry enthusiasts who built the brand. At times, that has ruffled feathers, but is expected to be an engine for growth. In 2012, before the branding change, MEC generated $302 million in sales from 16 stores. Last year, sales came in at $366 million from 18 stores. By the end of 2016, there will be 22 stores in Canada.
"For the brand to rejuvenate, sustain and rebuild, it requires reaching out to new people," said David Ian Gray, a retail analyst with DIG360 Consulting in Vancouver.
Not as many Canadians heading to back-country
"Research has shown that Canadians aren't as prone to going into the pure wild anymore, the backcountry. That's the reality and MEC isn't able to change that on their own, so they need to adapt to what people are doing and what activities they're participating in."
Starting in 2012, MEC began holding running clinics and bike races, and offering paddling lessons to draw in less-outdoorsy customers, which has become a key part of its strategy.
The stores physically become community hubs, said Meriko Kubota, director of community investment with MEC.
"Where members come to the stores, they're not only purchasing to get outside and recreate. but we connect them with the clinics, so they know how to get outside."
If MEC doesn't want to show people how to get outside, other stores are probably willing to, according to Gray.
"One of the reasons for the expansion is probably to get ahead of competitors who could come into Canada, or come at them from Canada. It's still an underserved market."