Outdoor and hunting gear retailer Cabela’s Thursday said it’s slowing its expansion after finding that its new superstores are taking sales from existing stores.
The retailer’s revenue rose 4.6%, to $927 million in the most recent quarter, but with 10 new superstores year over year, same-store sales fell 4.2% and profit fell 19%.
The retailer is still continuing its expansion, just slowing it. Cabala’s plans seven new stores next year and again in 2017, and says they’ll be smaller ones, with a goal of eventually running 225 stores in North America from its current 74.
Cannibalization is a real threat to retailers planning brick-and-mortar expansions in an era of continued rising e-commerce. Cabela’s has apparently learned that the hard way, with its superstores peeling customers away from existing stores.
While Bloomberg points out that creating an experiential superstore, filled with taxidermy, a shooting gallery, and a kennel like the Cabela's store in Hamburg, PA, creates a "tourist-type experience" for visitors, each of these stores require heavy investment and maintenance. Cabela seems to be winding down on these stores, instead focusing on smaller stores that most likely cost less to start up.