Sunday, March 17, 2019

Dick's Continues Losing Streak with Gun Control



Dick's Sporting Goods is committed to removing firearms from its stores. This reflects an ideological commitment by the chain's CEO, Edward Stack. The chain will be removing firearms from 125 of 720 stores.  From retailtouchpoints.com:
DICK’S Sporting Goods is doubling down on its decision to tighten gun sales policies. The retailer will no longer sell firearms and select hunting gear at 125 of its 720+ namesake stores after testing the concept in 10 locations last year.

Nearly one year ago, DICK’S CEO Edward Stack admitted that the retailer’s assault rifle ban was “not going to be positive from a traffic standpoint and a sales standpoint.” The retailer stopped sales of the assault-style rifles at all 35 Field & Stream stores and ceased selling guns and ammunition of any kind to buyers under 21 after the Feb. 14, 2018 Parkland, Fla. high school shooting in which 17 people were killed.
Firearms sales are lower this year, in general, than they were in 2018. The slump is noticeable, but sales remain high compared to historical norms. The election of Donald Trump has removed much of the fear factor that powered sales in the record breaking election year of 2016. Even considering the industry wide slump, Dick's decision to blame guns for societal ills has cost it considerable business.  From vox.com
Many major gun companies have also since refused to do business with Dick’s. In one statement, O.F. Mossberg & Sons Inc., the parent company of Mossberg guns, urged shoppers to “visit one of the thousands of pro-Second Amendment firearm retailers to make their purchases.”

Dick’s has suffered financially; one shareholder last year even accused the company of “willfully giving up money.” As of November 2018, its sales were down almost 4 percent, and many gun rights advocates have pledged to stay away from its stores. In the investor call, Stack said that Dick’s continues “to see double-digit declines” in its gun business, and that the company “would expect that [sales] continue to be down.”
Dick's showed its antipathy toward guns and the Second Amendment, when it announced it would destroy the guns it was no longer selling in its stores, in February of 2018. It takes a special kind of commitment to an ideology not connected to your business, to destroy inventory worth hundreds of thousands of dollars.  This virtue signals to some people. Those people are probably a small minority of Dick's customer base. By virtue signalling to them, the store signals to the majority of its customers that it does not share their values.

The only substantive effect destroying the guns is to increase gun manufacturers profits. The manufacturers simply increase production to meet the demand that was not met by the guns Dick's decided to destroy.

It is not a good business model. Dick's hopes to make up for the drop in firearms and hunting products with an increase in online sales. What Dick's seems to be doing, is working hard to change their customer base to one that aligns better with ownership's ideology.

Business owner who separate business from politics have an advantage: they do not alienate any particular segment of society. 

 Market experts are wary of the change. They are waiting for the results.

Dick's does not rely on guns and hunting for the majority of their income. They are not Smith & Wesson, which was driven to near extinction by decisions gun owners deemed to be anti-Second Amendment. But they are not immune to the pain caused by the CEO's political decision.

They are being hurt by Second Amendment supporters refusing to buy at Dick's. Other retailers are paying attention.

Showing antipathy to Second Amendment supporters does not seem to be a wise business decision.

©2019 by Dean Weingarten: Permission to share is granted when this notice and link are included.

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1 comment:

Paul Weber said...

Dick's still hasn't figured out that when you treat a specific customer segment as "crap" they will shop elsewhere.