As the inventory supply chain has unclogged and demand remains steady, the Grassroots Outdoor Alliance’s more than 100 independent specialty retail members are reporting that 2023 is looking more like a normal, pre-pandemic business year.

A free-flowing supply chain also means fewer missed orders and a more stable retail environment, according to Gabe Maier, president of Grassroots.

“The general theme is that we’re actually headed back to a more normal industry, versus the wild swings of the last three years that nobody knew how to predict,” Maier said.

There’s one caveat to returning to normality, however: Stores working through the extra inventory they have on hand, which has been a reoccurring issue this year.

Grassroots membership is made up of 104 retailers and 209 doors in 44 states. Its membership has doubled since 2014.

The Grassroots members submit a monthly report that gives Maier top-line sales numbers and top-line margin numbers. The organization compiles that information as a benchmarking tool then also includes anecdotal comments.

“We tend to have a decent pulse about what’s going on,” said Maier, who was hired to lead the organization in 2022.

Sales Up 4%

From March of last year through March 2023, overall sales are up more than 4%, with margins down about one basis point year-over-year.

For the first quarter of 2023, sales are up about 1.5% over the same period in 2022, with average margin down about 3 points.

Maier attributes the margin decline year-over-year to limited product availability last year which allowed retailers to sell goods at full price. Today, retailers are forced to offer more promotions to move goods.

“The underlying story here is that this is actually getting back to the more normalized sales that we saw pre-pandemic,” he said.

While the 2023 margin is three points lower than 2022, it’s almost one and a half points above 2019-2020 margin numbers.

Maier said a lot of retailers are going back to those 2019 numbers to make their projections.

“They were pretty clear-eyed and sober about the big numbers (during the pandemic),” he added. “They knew it wasn’t sustainable. It was awesome, but they knew it wasn’t going to track forever.”

Inventory Pain Point

Last summer, retailers were starting to sense that the backed-up supply chain was going to unclog, Maier said. It did exactly that around November-December.

Delayed deliveries started arriving, and the backstock piled up.

“People are working through it right now,” Maier said. “The saving grace has been that demand has been strong from the customer so we’re seeing strong sales through our retail stores.”

Another silver lining: Sales that might’ve been missed during the supply chain challenges of the pandemic are no longer being missed because the inventory is there.

“They tend to have whatever a customer coming through the door is looking for on hand,” Maier said.

Spring 2023 orders are arriving earlier and more complete than during the pandemic, he added.

As a result, retailers are being more careful with their pre-season orders to prevent a further inventory overhang, according to Maier.

Staffing Problems, Regional View

With the heavy, extended snow in the West, some Grassroots members are trying to manage how to cater to the summer retail customers while people are still skiing much later than usual. That’s a unique challenge for many of them.

Out East, because of the poor ski season, a lot of retailers didn’t move through as much inventory as they would have liked.

From a high-level view, Grassroots members have been consistently reporting staffing issues at retail stores as an ongoing problem for the past two to three years.

“We don’t go a month without hearing about that from retailers,” Maier said. “It’s been a challenge to find folks to work the floor who are engaged, want to be in the industry, and are passionate about what they’re doing.”

Many retailers are in outdoor-destination towns that have become even more unaffordable as housing costs have skyrocketed in the past few years. Retailers are trying to increase salaries and wages to attract workers.

“That does really put pressure on their margins,” Maier said.

Bart Schaneman can be reached at [email protected].