Dealers suffer as Bass Pro expands

Dealers, if you haven’t noticed, Bass Pro Shops is growing.

The outdoor retailer, which currently is the fifth largest U.S. sporting goods chain, has opened more than 10 new stores in the past two years for a total of 25, and has chosen future locations for 15 more.

Because, unlike most sporting goods retailers, Bass Pro sells boats and engines and services those products through its Tracker Boating Centers, the stores pose a threat to local dealers as they move into new boating communities.

Monk D’Agata, chairman of Fremac Marine in Bridgeport, N.Y., is learning first-hand how a new Bass Pro store can impact business.

A new store opened in Auburn, N.Y., about an hour from Fremac Marine, in June. Immediately, pontoon and aluminum boat sales screeched to a halt for local dealers, according to D’Agata.
His business was particularly hard hit.

“Fremac Marine is a Tracker dealer so it hurts us immensely,” he explains.

Ultimately, Tracker dealers can’t do anything about it. D’Agata says his agreement with Tracker allows the boat builder to put a store right next door, if it wants.

Dealers losing business
Dealers near other Bass Pro stores have told D’Agata to expect to lose 50 percent of his Tracker business in the first year with the possibility of gaining 25 percent of it back in the second year. Though it’s too early to tell if this prediction will come true, D’Agata is concerned.

“I know people from four miles down the road that went to the Bass Pro store because they think the price is better,” he explains.

Supposedly, all Tracker dealers offer the same pricing, D’Agata adds. Regardless, the perception that large chains provide lower prices remains.

In some ways, Fremac Marine has been lucky. So far, the dealer hasn’t lost any employees to the new store. Several other local dealers have lost technicians and salespeople.

“They’re trying to be the Wal-Mart of boating, as far as I can see,” he says. “It seems to me that they’re trying to do away with small dealers, independent dealers.”

D’Agata isn’t the only worried one. Dennis Honeywell, executive director of the Boating Industries Association of Upstate New York, says the movement of big box retailers into the boating business is a “major concern” to his members.

Because the association also organizes the Central New York Boat Show, which has the largest footprint of any N.Y. boat show, this concern takes on another dimension. Many members would like to see Bass Pro Shops banned from exhibiting.

It wasn’t an issue in 2005 because the show was sold out before the Bass Pro store demonstrated any interest in exhibiting. But it likely will be an issue in 2006. How it will be resolved remains to be seen, according to Honeywell.

“Bass Pro Shops is a wonderful promoter of the boating lifestyle,” he says. “They are promoting what we are selling so we have to support them. Yet it does scare the members that are selling any aluminum product.”

And Bass Pro Shops isn't the only threat. Several new Gander Mountain stores have opened in the area. Now that Genmar Holdings has signed a supply agreement with the retailer, those stores may also impact Honeywell's members.

A tough competitor
The Bass Pro locations are designed as destinations, drawing potential customers from miles away with a unique combination of product, demonstrations and entertainment.

The Auburn location, for example, boasts its own oversized indoor aquarium, with fish feedings several times a week, in addition to hunting and fishing video games.

In the plans for Bass Pro Shops’ Buffalo, N.Y., location, which at 250,000 square feet will be the third-largest in the company’s chain, are boating demonstrations and guided fishing trips. The future store is also part of a larger project that will include a hotel, restaurant and museum.

These types of features – and the selection offered by the sporting goods chain – make competition difficult. The chain also has the advantage of being owned by Johnny Morris, the same executive that heads up boat builder Tracker Boats and boat dealership chain Travis Boats & Motors.

Meanwhile, the retailer’s growth continues, affecting more dealers each year. D’Agata says he has heard Bass Pro Shops plans to eventually open 50 new stores.

He plans to fight to hold onto his customer base. At the upcoming boat show, Fremac Marine will run its own promotion for those who buy Tracker boats.

But he, like a growing number of Tracker dealers nationwide, has a decision to make. After 48 years in business and nine years as a Tracker dealer, Fremac Marine will continue working with Tracker for now. While D’Agata has considered changing lines, he will wait to see what happens
in the first year to year and a half.

“Some dealers have said it actually helped to increase their business,” he says with a shrug.

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