Hi Everyone,
I’ve temporarily removed this post because there are bigger issues behind a handful of comments I’ve received and what I’d blogged on in this orginal post. The issues are highly contentious and are tangential to MEC opening bike stores and service centres.
On a very pragmatic basis, when I started this blog two years ago, my goal was to push transparency within MEC and a broader dialogue with our members/general public, as they pertain to ethical sourcing. In 2009, I still hold that ideal but now at this stage of my work with various industries, brands and factories, I need to be more circumspect. Simply because the people I work with (or need to) would rather not have mutual issues visible on the world wide web. I fully agree with that.
Our goal is to improve the working condition in factories that make bikes, footwear, clothing, tents and packs and etc., To build on our prior gains, we need to move to the next level of negotiations with our contract factories or industry colleagues. These conversations ought to be held in private which frankly in my experience makes blogging awfully boring.
Cheers
This is great news! We have tried to do research into the bicycle industry, but as you mention there is nearly no information about their CSR performance. Good luck on shaking up the industry.
One solution?
Buy a locally-made bike.
Canada and the US still have good to top-of-the line bike manufacturers. DeVinci, Rocky Mountain, Cannondale, Trek and others produce bikes made in Canada or the US, so presumably under the control of laws ensuring a greener product. And while parts will always be coming from Asia, at least you can make sure the frame and the assembly of your next bike will have been made under “correct” conditions.
Will MEC bikes be made in Canada? Unfortunately, I think I know the answer to that.
Hi Christian,
Most frames and forks of performance bikes are moulded/welded in Asia (specifically in Taicheung, an industrial city not far from Taipei) and parts of China. Almost all components and accessories are made in Asia.
Most bikes are designed locally (in conjunction with Asian manufacturers) and are assembled in local dealers, warehouses or distribution centres.
Are there ANY performance bikes truly made in Canada or the US? Unfortunately, I think I know the answer to that. If anyone out there knows better, please correct me.
I’m not a sport biker. But I gave my car away and love getting around the city on my retro mountain bike. It looks like a 1980s flash back… grey and splatters painted in various colours. Most bike repair shops will refuse to fix it… I’m told that it would be cheaper just to get a new bike.
Then I found the “bike joint” on Harbard st. I rarely have to pay over $50 and the guy knows that I use my bike just to get around the city- nothing fancy.
Thus, another approach is to build a network of people who respect crappy bikes so so you don’t have to buy a new one. Plus, there’s no stress with bike theft.
@ HC
I think Marinoni, Balfa and Raleigh are all made in Quebec bikes…
Here’s what I found:
Marinoni and Balfa (2004)
http://www.geocities.com/velonouvelles/articles/04/juin/P6C.html
Balfa (2003)
http://www.geocities.com/velonouvelles/articles/03/mai/J3.html
Raleigh: at the bottom of that page, it’s written that they make 80% of their frame here (in Ontario or Quebec)
http://veloptimum.net/velonouvelles/8/ART/3mars/P22p.html
All those links come from that site:
http://veloptimum.net/Velop/industrie.html
Hi Laurent,
Thanks for the great info. It appears that Canadian manufacturing of bikes is on a downward path.
Balfa was bought out a few years ago and no longer exists.
In terms of the other brands, it is unlikely that they would produce bikes for MEC and have MEC brand them under its own label. We will be competing directly with them in the domestic market.
Cheers.
Allo,
Been riding a Supercycle that has it’s frame manufactured in Quebec. It is strong and heavy.
Someone mentioned once the frame might have been welded by Corrections Canada prisoners under a skills learning program. Still reconciling that ethics of that scenario; it is healthy to learn but it is mean to make people work for not as much as the private sector.
Perhaps this is only hearsay, and rides well regardless.
Hi Dave,
re: work by prisoners – I work to put bread on the table, why shouldn’t prisoners do the same, especially if they’re doing something useful.
Pierre.
Hi Pierre,
I guess it depends on how profitable it becomes to keep people in prison. The taint is not from a moralistic repugnance of prisoners themselves, but from the proffiteering of their forced labour. Forced labour is the same if you are an immigrant having your passport withheld (“for safekeeping”) by the factory you labour at, or if your legal incarceration is looked upon as a basis for industry.
Interesting… I guess prison labour depends on if the labour is expected or voluntary re: ethics. But then again, the level of corruption in some prisons would make one question cohersion. I’ll tell the next supercycle rider I see.
“This is controversial not because of the manner in which the bikes are made but rather in MEC’s competitive model”. Okay, so when do we hear about the controversial piece? I know that this is the biggest quesion on my mind…
Hi Tess,
Bike retailing in Canada (and the US) is traditionally run by independent dealers who typically buy from distributers. They are small and local operations.
The controversy is MEC is not small and local. In some ways it’s similar to a big box operation in terms of its impact on small local out door retailers. It’s for them to compete with MEC.
On the positive side MEC is owned by its members, it brings better pricing to it’s cutomer base and all the profits less operating costs goes into community and environmental grants. One day some of this money will go to improving working conditions in the factory.
Thanks for your email.
To answer your question, Litespeed, Merlin, and Seven are all performance bikes and made in North America.
How does selling bikes fit into the model of being a Co-op?
Yes! please tell us more. I am having a hard time finding any really informative articles or reports on the labor conditions within bicycle factories. Sweatshop watchdog groups are mostly focused on the garment industry.
Hi Bob,
How does selling bikes not fit into the model of being a Co-op?
Hey HC,
I know it is not against the law, but MEC entering a marketplace where items are available at a low price and in many areas seems against the idea why MEC was created in the first place. Vancouver has dozens of bike shops. So why does MEC want to enter this marketplace? I understand that quality climbing goods where hard to come by and MEC filled a void but there is no void here.
Hi Bob,
Thanks for the clarity. Yes, MEC emerged from the need to sell/provide gear to Canadians at a time when trek or climbing equipment was unavailable.
Now with the exception of few and very select gear, most stuff can be bought elsewhere or on the web.
One of the reasons why MEC is getting into bikes is because our members are asking for it. Another reason is MEC’s goal of getting more Canadians outdoors.
At the end of the day, MEC is a co-op retailer. It provides quality products at reasonable prices. It is not a human rights organization, an environmental NGO or retailer of last resort (eg., filling product gaps in the market place). It’s a retailer co-op that reinvests its gains into its operations, the local community and socio-environmental initiatives.
The impact on local bike stores may be real. And if they do happen,
HC,
Quote: “One of the reasons why MEC is getting into bikes is because our members are asking for it.”
Well… I’m a member and I’m not asking for it. I’m getting tired of the ‘Big Box’ way the co-op is going. I used to shop at the hole-in-the-wall co-op down on the river in Calgary, great service. Then the massive shop opened up lost its specialty appeal for me.
Winnipeg had a few great shops before I moved there, now a mini co-op moved in and created hype but the staff lacked training and no-one had any expertise.
Now I live in Victoria and I’m saddened by the price bullying that has affected some of the great local shops here; Particularly within the local paddling scene.
Now bikes? I’m starting to wonder what will stop MEC from going into every category and every city. Just like all the other Big Box stores.
Quote: “In terms of the other brands, it is unlikely that they would produce bikes for MEC and have MEC brand them under its own label. We will be competing directly with them in the domestic market.”
Doesn’t that last statement reflect the issues brought up by other members here? Why buy bikes from MEC if they offer nothing but ‘competitive’ price and so-called one stop convenience … the same ‘no-name’ generic appeal as Superstore.
I know that MEC CAN do better. Source out Canadian! There is no excuse. Even if it means selling a north American product non-MEC brand. Someone has to stand up and why not a co-op?
As a member that’s what I want.
Hi J5
Thanks for your thoughts. You do touch on a number of controversies surrounding MEC such as Big Box, dislocating local stores and etc.,
MEC’s membership base is evolving and the Canadian population is too. More and more members are not hardcore climbers or paddlers. They are casual users with a more urban lifestyle and they want product a bit different from the hardcore and traditional MEC member.
As MEC evolves, it loses its appeal to some members. It’s unfortunate and troubling but it’s reality. It’s impossible to be all things to everyone. You rightfully want a small and run down store yet other members want a broad assortment in a big shiny store.
As I’ve told dozens of unhappy members, if you feel MEC has gotten off track get yourself elected on the Board or contact the Board member closest to you.
Thanks for your legit view.
Thank you for your reply.
Just to be clear, I have no issues with the nature of the store. In that I don’t mind shiny new stores, particularly stores that are refurbished older buildings with recycled/enviro materials.
For me, I see the co-op taking the price, mass consumer, market driven approach instead of the high road ~ethically (beyond limited UN standards), locally sourced and manufactured (as much as can be found and/or CREATED), socially viable (meaning not entering markets that clearly have enough quality retailers and product) putting smaller operations out of business. I see the move to selling bikes as a striking example of this paradigm.
Also, I disagree that the membership is changing. I think the store is changing and attracting the price shoppers. Creating a hyper-rationalized model of consumption over quality and responsibility.
The high road has always been an option. Maintaining strong memberships that require the best product with the best social/enviro story and service.
I thought speaking on this MEC Ethical Sourcing forum was a way to for me to express my views to the board. I assumed that they (board members) might be interested in what I (we) have to say. As becoming deeper vested in the company and its bureaucracy is not something most of us have the time to do.
Thanks again.
Hi J5
It would be disingenuous of me to claim that MEC doesn’t have big box and mass consumer characteristics. In my opinion it does. Finding the balance between a well run retailer and a socio-environmentally bent organization is challenging. There are many tug of wars internally.
In terms of the membership base changing. It has changed in some respects as I’ve described before in terms of more day trippers versus hard core out door types. As much as some members want MEC to remain the same it can’t. Here’s why.
Health Canada projects fewer and fewer Canadians being active in the years to come. Which means the outdoors will be under utilized and under appreciated. This impacts MEC in terms of its membership base and future revenue.
Second, MEC is predominantly a “white” membership base run by a “white” board and management. (This is not leading to some us versus them ethnic rant). Canada is increasingly less white. Which means MEC’s future potential membership base is changing and will dramatically change in the near future. Most people of colour are not heavy outdoor people. “They” approach trekking and camping much different from MEC’s traditional membership base.
MEC must understand this demographic reality in order for it to survive in the future. Immigration and birth patterns are changing Canada and the marketplace.
As a socially progressive organization, MEC is incredibly ethnically insular. As I alluded to above, it is an organization run by one dominant ethnic group. Is there something wrong with that? Well is there something wrong with a university that only has male professors or a profession that only draws one economic bracket of people? The answer is obvious. The organization is much poorer for it and less legitimate to the excluded groups.
MEC is changing and it must change to be relevant to Canada’s changing appreciation for the outdoors and evolving ethnic demographics. I personally embrace that change not only because I’m a person of color but because I find the economics of retailing and the market place quite fascinating.
Cheers
I joined MEC in 1978 when I lived within walking distance of the outlet. It catered strictly to dedicated outdoors enthusiasts. The mission statement still reflects this but the current image and reality do not. MEC has now gravitated to and arrived at Big Box status. There is no turning back. There is now a glaring opportunity for a new version of the original. Additionally,there are enough bicycle shops in most parts of Canada to supply the need. A significant number are marginally solvent without the recession and while I applaud MEC’s commitment to cleaning up the industry, I personally think it would be more unethical to put many existing bike shops out of business. If you’re determined to open something new perhaps you should reestablish the mission statement with a “Back to Basic Essentials” department instead.It would cater strictly to the dedicated outdoors enthusiasts who are harassing you for this service.
Les
Well said, Leslie.
There is an inherent conflict between MEC’s original purpose and it’s big box state.
I don’t think there is an ideal state for MEC. It would be very hard for MEC to survive if it went back to the basics. The market and consumers have changed considerably. Selling the absolute minimum/essential or only filling in gaps where other retailers don’t dare enter, in my mind, is a path to financial suicide.
There are so many ways to get climbing gear and other stuff that MEC has to be able to compete at all levels and in a wide range of commodity groups. Anyways, I hear you there is an inherent conflict as you describe.
Thanks.
the parts will always be coming from Asia?
Why? I see that cannondale has the ability to innovate and research because of their “high volume discounts” on materials. Where does this come from. Who is making the sacrifice for cannondale’s success?
Hi Jeffrey,
The product manager who is leading the charge for MEC comes from Rocky Mountain Bikes. He’s done all the technical design in Vancouver and in a few years he and the other bike accessory managers with other MEC technical designers are going create an integrated feel and function to MEC bike clothing and gear. The Marketing team is designing all new logos and outreach strategy for this line. It’s funky. Design is done in Vancouver.
I’ve been to the factories (note plural) which will likely be “awarded” MEC bikes. I witnessed and touched Cannondale frames coming off the same production line.
Thanks for your input.
I am a Canadian living in London, UK. Over here, fold-up bikes are very popular…and useful. Does anyone know of any Canadian bike companies that make a quality fold-up?
MEC’s intention to sell bicycles is irresponsible. Bicycle repairs aren’t easy. My training (BCIT) and experience repairing motorcycles, small engines, and rental equipment, plus having tool boxes full of professional tools were barely adequate for the repairs I have done recently on my MTB. The crank puller I bought form MEC didn’t come close to working. I doubt the average rider has the skills, training or adequate tools to repair their own.This recession is going to put enough bike shops out of business without MEC pouncing on them. In the less populated parts of the country, which is most of it,this will leave the very people MEC was originally intended to service with otherwise perfectly good bicycles in unusable condition for lack of accessible repair shops. Consumerism wins again! This might turn out to be the dirtiest trick ever played on the self propelled recreation community. Les
Hi Mark,
MEC will be retailing a folding bike. It’s likely to be made in China.
Hi Les,
I’m not sure what you find irresponsible about MEC and bikes. Is it selling bikes in a retailer environment dominated by independent bike dealers or is it selling bikes when technical skills are required to maintain them.
In terms of the latter, there’s a bike tech guy who leads all the bike repair shops in MEC stores. He’s been around and he knows his stuff.
In terms of MEC’s impact on bike stores that is sensitive and controversial. MEC selling bikes will likely make the market more competitive. This is an issue that has been dealt with in length by MEC’s Board.
I doubt MEC will have a huge impact in the less populated areas, as MEC doesn’t retail in the those areas unless consumers shop on line.
Thanks for your comment. Bikes at MEC are controversial. I personally don’t think it’s a dirty trick.
What a thought-provoking discussion !
- a couple of thoughts…
- several times I have heard the comments…”the Market is changing..”, Big Box stores..”, “…putting the Small Dealer out of business…”.
- I have to say, I side with the “smaller is better” arguments. When I see “Made in China”, or”..in Taiwan”, I become incensed. If I wanted goods for the lowest price, I’d just go to a Big Box store like Wal-Mart. I’m willing to pay a premium to support Canadian, or U.S., quality goods. Perhaps many others feel the same, and the present policies and proceedures have driven all of us out of the “Market”.
As far as ‘competition with local bike shops’, and ‘encouraging bike use’ are concerned, perhaps a way could be found to support local bike shops,( perhaps a subsidy for using local parts or labour), without going into direct competition with them.
…these are some thoughts on this thorny question.
Jim
Hi Jim,
Thanks for your thoughtful comments. I’m obviously bias towards MEC selling bikes as I need MEC to do well in order for me to pay my mortgage and my daughter’s Montessori fees.
Aside from this bias, I’m really bugged by my local bike store in Kitsalano. The guy is polite and the mechanic super helpful but the prices are horrendous. I bought a tube there for just over $5. I can get an equivalent tube at MEC for $3.50. Recently, I had to replace my entire back wheel at $155. MEC quoted me $100 – 120.
I like to support the local store but when their prices are consistently 30 – 50% higher than MEC it makes me wonder if they’re grossly inefficient or just plain gouging me. All these bike parts are coming from the same group of factories in Asia and a little bit from NA.
To be frank, as my finances become tighter, I look for bigger bargains and paying 5-10% for made in Canada is within my range but 30-50% is downright fool hardy.
HC.
MEC’s position and stated mission to behave ethically and be socially responsible is laudable but disingenuous. While sourcing goods ethically in places like China is a priority, MEC is prepared to abandon those same principles at home in the interests of their own business objectives.
MEC’s entry into bike retailing is the issue and yes MEC’s competitive model is a problem. However, since you say “This huge and complex scenario will not be discussed here” let me boil it down for your readers.
MEC was established as a co-op to sell mountaineering gear that was not available in the market. That arrangement came with a big competitive advantage in that MEC paid no corporate tax. Fine. The problem was (and is) that, once a co-op was established, MEC was free to enter other areas of products regardless of the fact that those products were already available. MEC has taken full advantage of that loophole and exploited its competitive tax advantage with the result being that many outdoor retailers went out of business. Now MEC wants to sell bikes. Why???
I am a bicycle retailer in Vancouver. There are some 60 bike shops in Vancouver, doing approximately 30 million in sales. With 60 shops there is certainly no lack of selection or competitive pressure. There is an abundance of product and an abundance of places to buy that product.
Contrast that reality with the Co-operative Secretariat of Canada that lists as the benefits and objectives for co-ops to exist: job creation, correcting market imbalances, serving community needs, filling market gaps (the reason MEC first came into existence) and empowering little guys. Also, consider that all co-ops are supposed to act out of concern for the community. MEC’s own mission and value statement is that MEC will act with social leadership and community spirit.
Yet MEC, is going after the more than 60 family owned bike businesses that more than serve the market. So, rather than serving their community and empowering the little guy, MEC has grown to such arrogance of its own principles that it would rather crush the little guy to steal ever more business out of the market economy. With no tax benefit to the community, one has to wonder why government would allow this to continue, as any reason for MEC to ever exist has long since passed. Yet, they continue unchecked in their quest for growth.
MEC’s own CEO attempts to sweep these issues away. Reading the transcript of a past AGM, in response to member concerns MEC is getting too big, he says their expansion is in response to “member demand”. So when he opened a new store in Montreal that devastated local retailers, was that in response to member demand?
It should be noted the MEC was formed to provide a small group of people with mountaineering gear that was not readily available in Vancouver. So, one has to ask why this has been allowed to grow into a cross Canada enterprise. Surely, the store in Halifax is not there to provide mountain gear for people in Vancouver. Yet, MEC has expanded into every major market, taking sales out of the market economy.
Furthermore, at the same AGM, the MEC CEO attempts to paint MEC as a small retailer with only 2% of the market that has lower margins and higher expenses (because they pay people more, he says) than similar businesses in the regular market.Yet, his arguments are untrue. Looking at the the financial statements of the Forzani Group, owners of Sport Chek, SportMart, Coast Mountain, Sports Experts and compare those with the numbers reported by the MEC CEO at his AGM. MEC margin was 33.7% and MEC expenses were 28.5%. Compare those with Forzani margin of 33.9% and Forzani expenses of 27.8%. The numbers are virtually the same.
Now also consider that Forzani sales were 857 million compared with 200 million for MEC. But Forzani has 260 stores in that group under many different banners. MEC has only 11 (or is it 12 now) stores all under the MEC brand. So, rather than a minor player, MEC is in fact, the largest sporting goods dealer in Canada under one banner AND their margin and expenses are no different than the other largest players. The only difference is that while Forzani struggles to deliver share value, MEC is debt free with over 100 million in the bank and intent on getting even bigger.
As I have already pointed out, there are 60 bike shops in Vancouver and MEC has already done serious damage to our industry. While the number of stores may suggest a robust industry, the truth is that there are very few healthy dealers. The reason is MEC and their entrance into the cycling clothing and accessory market several years ago. According to the CEO of MEC, cycling is now MEC’s largest area of sales. This has come at the expense of independent bike dealers who now lack a critical portion of their business (clothing and accessories) due to MEC’s aggressive pricing and sourcing practices.
Recently, MEC opened a store in Victoria. All the bike shops there report a loss in sales revenue for clothing. Consumers, persuaded by the low price of branded accessories (intended to be exclusive to bike dealers) obtained by MEC through grey market channels, are now buying their $200 Chinese made jackets at MEC.
As a result, bike shops have lost a significant portion of a critical portion of their business. The effect being that revenue and profits are reduced at the same time that there is significant upward pressure on wages. Yet, with MEC creaming off the most profitable part of our business, retailers are unable to raise wages. And now MEC also wants to sell and service bikes and are stealing our employees to do it.
None of this makes sense. MEC is taking business away from businesses that pay income tax and contribute to the tax base. For this exchange, what benefit is there to the community? MEC’s paltry donations to environmental causes are an advertising expense that do not balance the damage to the local economy, private businesses and the families they support. It seems that MEC is running counter to virtually every benefit that a co-op is supposed to provide. There is no market gap, MEC is not creating jobs, MEC is not helping local economies. On the contrary, MEC is going after markets that are well served, MEC is taking jobs away from existing businesses and in every market MEC enters, existing business are damaged.
The MEC has become an 800 pound gorilla that has devastated the outdoor industry. Now they have set their sights on family owned bike shops in their quest for continued growth.
Imagine for a moment that whatever business you work for suddenly has a giant competitor move in next door. Now imagine that the government has given that competitor an indefinite tax holiday.How would you feel? Do you think that would be unfair when that business is selling exactly what you already do and giving nothing back to support the social programs and tax base on which we all rely?
Ethical and socially responsible? You decide. When MEC executives keep using words like “market share”, “expansion” and “wanting to be the numnber 1 outdoor retailer in Canada” they are more in the league of the Wal Marts of the world, than the ethical and socially responsible, community minded co-op they pretend to be.
Consider that MEC has discussed plans to open satellite stores (like North Van) in suburban communities and even catalogue type stores (remember the Sears model) in outlying areas. Do those plans show any social responsibility for the impact on the local economy. MEC members themselves, need to say enough is enough and apparently, as evidenced here, some already are.
It is some comfort to see that many others on this blog feel the same. Realizing that there may be some member resistance, it appears that the new raison d’etre proffered by MEC for getting into bikes is the suggestion (no proof has been offered) that bikes are not ethically sourced. Your readers are supposed to challenge their local bike dealer about the origin of their bikes. Be careful. I for one have visited the factories where our bikes are made both in the US and Asia. All are ISO certified and were state of the art with excellent working conditions and good wages.
So, I ask again; why is MEC getting into bikes?
As an MEC member and bike dealer I have some views to share.
MEC’s position and stated mission to behave ethically and be socially responsible is laudable but disingenuous. While sourcing goods ethically in places like China is a priority, MEC is prepared to abandon those same principles at home in the interests of their own business objectives.
MEC’s entry into bike retailing is the issue and yes MEC’s competitive model is a problem. However, since you say “This huge and complex scenario will not be discussed here” let me boil it down for your readers.
MEC was established as a co-op to sell mountaineering gear that was not available in the market. That arrangement came with a big competitive advantage in that MEC paid no corporate tax. Fine. The problem was (and is) that, once a co-op was established, MEC was free to enter other areas of products regardless of the fact that those products were already available. MEC has taken full advantage of that loophole and exploited its competitive tax advantage with the result being that many outdoor retailers went out of business. Now MEC wants to sell bikes. Why???
I am a bicycle retailer in Vancouver. There are some 60 bike shops in Vancouver, doing approximately 30 million in sales. With 60 shops there is certainly no lack of selection or competitive pressure. There is an abundance of product and an abundance of places to buy that product.
Contrast that reality with the Co-operative Secretariat of Canada that lists as the benefits and objectives for co-ops to exist: job creation, correcting market imbalances, serving community needs, filling market gaps (the reason MEC first came into existence) and empowering little guys. Also, consider that all co-ops are supposed to act out of concern for the community. MEC’s own mission and value statement is that MEC will act with social leadership and community spirit.
Yet MEC, is going after the more than 60 family owned bike businesses that more than serve the market. So, rather than serving their community and empowering the little guy, MEC has grown to such arrogance of its own principles that it would rather crush the little guy to steal ever more business out of the market economy. With no tax benefit to the community, one has to wonder why government would allow this to continue, as any reason for MEC to ever exist has long since passed. Yet, they continue unchecked in their quest for growth.
MEC’s own CEO attempts to sweep these issues away. Reading the transcript of a past AGM, in response to member concerns MEC is getting too big, he says their expansion is in response to “member demand”. So when he opened a new store in Montreal that devastated local retailers, was that in response to member demand?
It should be noted the MEC was formed to provide a small group of people with mountaineering gear that was not readily available in Vancouver. So, one has to ask why this has been allowed to grow into a cross Canada enterprise. Surely, the store in Halifax is not there to provide mountain gear for people in Vancouver. Yet, MEC has expanded into every major market, taking sales out of the market economy.
Furthermore, at the same AGM, the MEC CEO attempts to paint MEC as a small retailer with only 2% of the market that has lower margins and higher expenses (because they pay people more, he says) than similar businesses in the regular market.Yet, his arguments are untrue. Looking at the the financial statements of the Forzani Group, owners of Sport Chek, SportMart, Coast Mountain, Sports Experts and compare those with the numbers reported by the MEC CEO at his AGM. MEC margin was 33.7% and MEC expenses were 28.5%. Compare those with Forzani margin of 33.9% and Forzani expenses of 27.8%. The numbers are virtually the same.
Now also consider that Forzani sales were 857 million compared with 200 million for MEC. But Forzani has 260 stores in that group under many different banners. MEC has only 11 (or is it 12 now) stores all under the MEC brand. So, rather than a minor player, MEC is in fact, the largest sporting goods dealer in Canada under one banner AND their margin and expenses are no different than the other largest players. The only difference is that while Forzani struggles to deliver share value, MEC is debt free with over 100 million in the bank and intent on getting even bigger.
As I have already pointed out, there are 60 bike shops in Vancouver and MEC has already done serious damage to our industry. While the number of stores may suggest a robust industry, the truth is that there are very few healthy dealers. The reason is MEC and their entrance into the cycling clothing and accessory market several years ago. According to the CEO of MEC, cycling is now MEC’s largest area of sales. This has come at the expense of independent bike dealers who now lack a critical portion of their business (clothing and accessories) due to MEC’s aggressive pricing and sourcing practices.
Recently, MEC opened a store in Victoria. All the bike shops there report a loss in sales revenue for clothing. Consumers, persuaded by the low price of branded accessories (intended to be exclusive to bike dealers) obtained by MEC through grey market channels, are now buying their $200 Chinese made jackets at MEC.
As a result, bike shops have lost a significant portion of a critical portion of their business. The effect being that revenue and profits are reduced at the same time that there is significant upward pressure on wages. Yet, with MEC creaming off the most profitable part of our business, retailers are unable to raise wages. And now MEC also wants to sell and service bikes and are stealing our employees to do it.
None of this makes sense. MEC is taking business away from businesses that pay income tax and contribute to the tax base. For this exchange, what benefit is there to the community? MEC’s paltry donations to environmental causes are an advertising expense that do not balance the damage to the local economy, private businesses and the families they support. It seems that MEC is running counter to virtually every benefit that a co-op is supposed to provide. There is no market gap, MEC is not creating jobs, MEC is not helping local economies. On the contrary, MEC is going after markets that are well served, MEC is taking jobs away from existing businesses and in every market MEC enters, existing business are damaged.
The MEC has become an 800 pound gorilla that has devastated the outdoor industry. Now they have set their sights on family owned bike shops in their quest for continued growth.
Imagine for a moment that whatever business you work for suddenly has a giant competitor move in next door. Now imagine that the government has given that competitor an indefinite tax holiday. How would you feel? Do you think that would be unfair when that business is selling exactly what you already do and giving nothing back to support the social programs and tax base on which we all rely?
Ethical and socially responsible? You decide. When MEC executives keep using words like “market share”, “expansion” and “wanting to be the number 1 outdoor retailer in Canada” they are more in the league of the Wal-Marts of the world, than the ethical and socially responsible, community minded co-op they pretend to be.
Consider that MEC has discussed plans to open satellite stores (like North Van) in suburban communities and even catalogue type stores (remember the Sears model) in outlying areas. Do those plans show any social responsibility for the impact on the local economy? MEC members need to say enough is enough and apparently, as evidenced here, some already are.
It is some comfort to see that many others on this blog feel the same. Realizing that there may be some member resistance, it appears that the new raison d’etre proffered by MEC for getting into bikes is the suggestion (no proof has been offered) that bikes are not ethically sourced. Your readers are supposed to challenge their local bike dealer about the origin of their bikes. MEC should be more careful before trying to throw bike shops under the bus. I for one have visited the factories where our bikes are made both in the US and Asia. All are ISO certified and were state of the art with excellent working conditions and good wages.
So, I ask again; why is MEC getting into bikes?
Hi MT,
Thanks for the valid comments. The economics of what you say are debatable but some of your points are true.
I would like to make a few corrections. MEC DID NOT get into bikes because of some messianic need to clean up factories. It is getting into bikes based on member demand and the goal to get Canadians more active. Of course this is debatable for some as you have noted in your earlier comment.
In terms of factories in Asia being the state of art in terms of working conditions and wages. I find that questionnable. No doubt there is likely a handful of progressive factories in Asia but the bulk have significant challenges. You’re right. We don’t provide proof in the public domain for verification (for libel reasons with factories). We can in private conversations.
Based on your eye-witnessed account you have not encountered any major challenges. Based on our fairly extensive work with NGO’s, environmental engineers, labour auditors and other bike brands in these factories, we’re seeing something else.
I hope your first hand experience is right because if you are, MEC is definitely chasing the wrong factories. And the world of Asian bike factories is not as dark as what my colleagues at other bike brands and I are are encountering.
I’ve been a MEC member since 1990. I originally signed up as a member in Calgary. At the time I became a member because of the great selection. At the time I really didn’t understand MEC’s Co-op tax status.
I make an assertive effort to support my local retailers. Bean Around The World as opposed to Starbucks. My local hardware store as opposed to Canadian Tire.
MEC has now become the a big national retailer as opposed to the local independant retailer. And they’ve done it on the back’s of their neighbours by skirting corportate taxes.
I’m an honest person who pays my share of taxes. I believe in supporting those who support me and my communities tax base. I will nolonger be making any purchases at MEC. My conscience won’t allow it.
“Are there ANY performance bikes truly made in Canada or the US? Unfortunately, I think I know the answer to that. If anyone out there knows better, please correct me.” HC (proving once again that ignorance is bliss)
My two-year-old Rocky Mountain Trailhead (bought at my local bike store) was designed, built and painted in British Columbia, Canada. The wheels were even built here. According Rocky’s website, the factory remains open.
My year-old Cannondale road bike (bought at my local bike store) says “Hand Made in USA”on it. Sadly, the company was recently bought by foreigners – from Canada – who plan to stop US production by 2010.
The folks at Pinkbike.com toured Devinci’s Quebec factory last summer and watched their aluminum bikes being made. Carbon Devinci bikes come from offshore. (http://brule.pinkbike.com/album/Devinci-Trip/)
Guru even makes fine, very pricey, custom carbon bikes in Quebec.
If MEC has its way, all these factories will be boarded up, and the jobs shipped to coal-powered China factories.
I’d be happier with open Canadian factories and boarded up MEC big box stores.
MEC selling private label bikes is not like a big box store selling bikes it is a big box store selling bikes. MEC has been able to exploit it’s co-op status for too long. How many other outdoor stores or bike stores are allowed co-op status, 0. When the co-op was formed it was difficult for outdoor enthusiasts to get the gear they needed at reasonable price. The co-op changed that to the benefit of our community. Over the years though MEC has expanded it’s product line and begun competing directly with more kinds of shops. If the co-op can make bikes why not cars or electronics. The co-op has been able to reach a dominant position in retailing in Canada by using an unfair business model. It was the same with REI in the states until ant-trust laws forced them to change how they operate.
MEC must be careful to listen to it’s members and accept a reasonable market share. The ethics that MEC claims to stand for must be stringently upheld or it risks losing it’s moral high ground.
chances are this won’t be posted but rest assured many of your members are concerned that MEC is to big for it’s britches and makes decisions based on greed and preserving the illusion that it has a moral compass.
MEC has become the Wal-Mart of the Outdoor Sporting Goods and now Bike world. MEC picks and chooses the brands they wish to carry in their stores that will compliment a vast selection of their OWN poor quality branded product. With profits each year put back into the cooperative and dividends never paid out to their members MEC has amassed over their 35+ years of operation over 100 MILLION DOLLARS in tax free, interest free working capital. As the company was founded by outdoor enthusiasts who also are/were accountants they were very smart to find the loopholes in the taxation system to fund their growth. Look at their American counterparts, REI, they are of equal size and are a cooperative. The main difference is that every year, they issue a cheque to their members for the amount of profit their shares are entitled to, and they key, one does not need to be a member to shop there. Their dividend cheques can be cashed in or used to purchase gear. Unfortunately MEC doesn’t do this. MEC talks about their community involvement and are very happy to talk about their membership in the 1% for the planet program. So MEC gives 1% of their 200 million plus dollars in annual sales to various causes whereas every other business in the industry must pay corporate taxes that go to fund local, provincial and federal programs such as health-care and any other government funded project or program. How is this ethical? How is it ethical to steal money from the Canadian population? I understand the purpose of a coop, but there comes a time when the co-op must acknowledge itself as a corporation that is owned by its share holders. MEC is no different than a Starbucks, Home Depot or WalMart.
MEC kills smaller companies, bypasses local distributors of products and outsources most of its production of its own products to factories outside of North America all while not contributing to the tax base. How is this ethical? Even looking at your ethical sourcing reports you employ factories that have poor working conditions, environmental issues and the worst of all utilize child labor but MEC doesn’t see it beneficial to Cancel their contracts with these factories that violate MEC’s ethical sourcing plan. You see fit to work with them to improve working/environmental conditions. But if you think about it, what is the incentive for the factory to change if you keep awarding them with dollars to produce goods?
There are no fewer than 5 bicycle stores within 2-3 blocks of MEC’s Vancouver store. Each one having a different specialty but all serving their own niche. With MEC entering in the market to sell and repair bicycles, this directly effects each one of these stores who not only sell but service bikes as well. How does it serve the community to put five SMALL BUSINESS’ in jeopardy? And let’s not forget the countless other bike stores found around Vancouver and in each city that has an MEC location.
People criticize WalMart in each city that it opens. It will kill small business etc etc. MEC is guilty of this as well. With each megastore that they open and with each new product category they enter, MEC puts at risk every small business that operates in direct competition within that given community.
Please explain to me how this is ethical?
I forgot to add the link to the Vancouver Sun Article in Saturday’s Paper (May 9, 2009)
http://www.vancouversun.com/news/break+unfair+competitors/1578970/story.html
I take it that this blog has closed down, but wanted my comments to reach you, so I hope they do.
I would agree that the concept of the co-op has perhaps crossed the line when MEC starts assembling its own bikes. Note that I use the word ‘assemble’ because that is exactly what I expect will happen. You will take components spec’d by you, and will assemble these components in Canada, presumably at a cost-savings to MEC Co-Op members.
However, take note of a similar venture run for years by a retailer in Thornhill – Silent Sports. They had a very successful line of bikes known as Thin Blue Line. Metro Police bought these well spec’d bikes, and TBL bikes could be found throughout Ontario and much of Canada.
These bikes featured top-line components and excellent aluminum or CRoMo frames. You could often upgrade components at the time of purchase. At the end of the day, the cost was 10-20% below a similar-spec’d Trek, Rocky Mountain, etc..
However, several years ago, they got out of the home-grown “Thin Blue Line” business because – according to discussions I had with them – they could no longer make a reasonable profit compared to simply retailing the mainstream bike names. And, when they had a failed frame design in one model, they had to accept the loss of replacing the frames…
I mention this simply because:
1) it seems to me that MEC risks a similar fate if there is a major product failure
2) seems more appropriate that MEC find a good canadian source that will be agreeable to assembling MEC bikes, made by “xxx”
3) the only reason MEC could enter into this venture and assemble bikes more cheaply is because of the unfair co-op tax status
Consider carefully the risks of entering into this venture from insurance costs of failed assemblies or the warranty losses.
More importantly,consider carefully the impact on the existing bike retailers.
I agree with other comments that Co-op’s should not have unfair competitive advantage in the existing local markets of specialty shops like bike retailers.
Steve
Hi Steve,
Thanks for the thoughtful commments.
“…I still hold that ideal but now at this stage of my work with various industries, brands and factories, I need to be more circumspect.”
Sounds like a classic case of corporate self-censorship. Not to be mean, but you can understand my skeptisism I hope.
I cannot help but fear this push to sell bikes has less to do with ‘helping members’ and filling market voids and more about making money. This is hardly the first product area the Co-op has felt necessary to expand into… look at the clothing department; more than half of it is casual clothing, work, school, city. We sell briefcases and computer cases as well.
only the future can tell.
Dear AC
Thanks for your thoughts. No it’s not mean. Maybe it is corporate self censorship. Is the glass half full or empty. It depends on how one sees it.
The challenge with blogging is what is sensible to me or to you is not to others. What is a positive blog on a factory could be as construed as being negative by that factory.
This blog reflects my idiosyncrasies. It’s not a corporate communication medium where everything is carefully thought through and then expertly written and laid out.
Anyways, I’ve realized that the serious conversations I have with factories about their conduct (or lack of) needs to be held behind closed doors. Getting them to be frank about their issues and then indirectly blogging about them is smarmy.
I’ve been troubled about this for sometime and the recent matter with bikes and my blog just expedited this simmering thought.
Cheers
I’m a member in a few different co-op’s including (MEC), and it’s kinda funny how little the general public actually understands about co-ops and how they work.
First off anyone really interested in learning about co-ops and how they work should do some digging on the web as many points pushed by MT and Nicholas are just straight up false, or they are just merely mis-informed.
1. I’m an MEC member and have spent quite a bit there in the last few years and have received 3 dividend cheques amounting to about 10% of my purchases.
2. Co-ops are not granted tax free status, yes depending on what they choose to do with profits they can pay significantly less tax. If they retain cash they pay tax on it just like anyone else.
IE. for all you sole proprietors out there, any profit you donate to a charity you would not pay tax on. your choice.
3. Bypassing distributors un-ethical?
This would be called protectionism, to protect poorly run businesses from going out of business by refusing new-comers access to product lines. I used to work in winter sports retail and this used to be rampant in that industry, distributors would pick which shops they would supply and anyone else was out of luck, guaranteeing those shops steady income regardless of their compentency by giving them exclusive rights to certain brands that were in high demand.
In our capitalism based/free market economy i would call this un-ethical.
4. Co-ops exist to fill market gaps? nope, thats how many start out though. In other countries co-ops are becoming the predominent way of doing business, there are even mulit-natioanl co-ops.
5.If being a co-op is such a great deal/advantage and your a business owner reading this why don’t you just go and incorporate your business as a co-op? You can. Go do it already.
If not would you not mind explaining why you would rather remain as a sole proprietor or partnership? (i’ll be Impressed if I get a straight answer on this one)
I choose co-ops every day, whether it’s for banking, grocery’s, farm supplies, insurance, and yes outdoor gear too.
I worry for the co-ops future because the current management seems hell bent on expansion… 3 new stores slated for Montreal and area (if I’m not mistaken), not to mention bikes and the ever expanding casual clothing section. Not to be elitist, but at what point does our ‘membership’ become indistinguishable from the general public? When MEC is serving the general public what differentiates us from Walmart (aside from sheer size)? At what point does the tax man come calling wondering why we run a business and yet pay no business tax.
When it come to bureaucratic organizations; business, governments, and co-op’s(?), size erodes community. Has MEC passed this threshold? It seems to me that the community we once enjoyed as members is slipping away. I understand that MEC is riding the industy flow as far as outsourcing the manufacturing it’s products, I just wish they’d make a better show of resisting the river flow or thinking of ways to get off/out.
I for one welcome MEC. If I can get a great bike at a great price why not? I care about where my goods come from and I know most of it would come from Asia. Why not though? They need money to and are willing to provide MEC with a good service. The funny thing is that MEC is doing nothing different than any other bike company out there that I’m sure all these nay sayers are riding. They are all “designed in the USA” or “California” but lets face it, 2 lines down they all say made in China. The world and market place has changed and I think it’s time that we do as well.
I forgot to add one more point. Most of the bike stores I’ve been to on the North Shore, aka supposed shangrila of mountain biking, are pure crap. Either nobody talks to you and ignores you, they are getting drunk in the back, or they are trying to sell you something you don’t want or even need. From the looks of it they don’t want my business or are not willing to work for it. That’s why MEC is making bikes, because all these stores suck and we the customers are sick of getting ripped off.
I had to add my voice as a member to the discussion of MEC’s “Big Box” mentality. I am an MEC member because I care very much about the attitude of the companies I purchase from towards social and evironmental sustainability , and on those points MEC is simply second to none. If MEC had 10 or 20 or 100 times the market share, that would be 10 or 20 or 100 times the vote in the marketplace for better working conditions and better environmental practices. No company is perfect but MEC is far and away better than most retailers of its size. If I could, I would buy everything I ever purchase through MEC–from business attire, to groceries, to major appliances. I would want an MEC store in every city I would ever move to. And I would want as many people as possible from everywhere shopping there. MEC should have a tax benefit over other large retailers, because it is people first instead of profit first, which is a fundamental difference. If you don’t believe this, spent any time at all working for any other ‘Big Box’ retailer and take a good, hard look at the decision-making processes that define them.
I know MEC is likely to stay focused on its core of, after all, “Mountain Equipment”. And it should. But I welcome any and all possible expansion that MEC is able to make sustainably and without compromising its ethical edge. Ten or fifteen generations from now our children’s children will measure our society by what percentage of our businesses were MEC-like in how they looked to the future, and that percentage is terribly, terribly minute.
Hi eM,
Thanks for your support. It’s appreciated.
Why does MEC need to compete in this market??
If MEC is a CO-OP, why does it need continual growth? How about continually supporting the COmmunity?
when will mec expand by building a store in the fraser valley? Langley/aldergrove/abbotsford would be ideal.
Hi J
I’ve forwarded your email to the guy who heads store operations.
thanks.
I’d like to write in support of MEC doing as its membership pleases.
To the small bike retailers: I love what you do. But for many of you, your days are numbered. This has nothing directly to do with MEC. It has to do with the expansion of other, larger operations. I grew up in Canada but now live in the US. Here we have [Editor's note: company name removed], a big box bicycle retailer. They have stuff for cheap. But you know what? I don’t feel like I can trust them. They market their bikes saying “free adjustments for life,” which sounds great, but is just a way to get you back into the store. And if you just ask for the free adjustment, they are awfully surly.
MEC, by contrast, is a ray of honesty in a darkness of routine business marketing spin. I actually have faith that they believe in existing for the sole purpose of serving their members, the customers, with no spin or inauthenticity. I can’t think of any other business that does this, with the exception of a handful of short-lived independent vendors (and they’re short-lived because, if you’re not a co-op, you’re always going to be out-competed by a dishonest merchant).
C’mon guys. You are taking MEC for granted. There’s no other company like it in North America. [Editors note: the remaining section of this paragraph was removed for libel reasons. The author made a comparison between MEC and another named company]
MEC is the best retailer in Canada, if not the world. It should not and cannot be lumped in with other “big box” stores, because it is absolutely nothing like them. MEC’s entrance into the bicycle market will make it more competitive and more honest. And this is a good thing for nearly everyone.
Hi Leo,
Thanks for your thoughts and support. For the most part, I’m a big fan of the market place. Customers will decide where to spend their bucks if they feel the product is good, priced right and the seller has integrity. If MEC slips on any of these fronts, customers will go elsewhere. To date, the opposite is happening.
I’ve had to edit your comments to remove the identification of industry peers or competitors for libel reasons.
MEC is a business. It makes a profit. Like all businesses, MEC reinvests that profit back in to the business to grow the business in order to increase its sales and compete with other businesses. However, MEC is a business that currently doesn’t pay income taxes and because MEC doesn’t pay income taxes, MEC and it’s employees and members have reneged on their moral responsibility to support Canadian social services. So MEC not only competes unfairly with legitimate, responsible, tax paying Canadian businesses, it also has shirked its responsibility to pay for the same social services which its own members and employees rely on.
Hi Ken,
Thank you for your perspective.
I wish working for MEC would mean not having to pay my income tax, payroll tax, GST/PST, municipal tax, car battery tax, solvent and paint taxes, tire tax, license plate and car registration tax and etc., Given that I pay all of these taxes, I seriously doubt I’ve reneged on paying my share of all the money spent on roads, schools, welfare, health care, defense, and etc.,
Cheers
Yeah, got to say, it would have been nice not paying taxes for those years that I worked at MEC. Having worked in retail in other countries in outdoor stores, I have to say that MEC is great in the way that staff treat the members. The other retail stores that I worked in were all about the sale, and the money, it didn’t matter if the person needed that or no, it was about selling them the most expensive product. I couldn’t stand that and it lead to me quitting out of moral outrage. Living overseas now I miss MEC.
If you own a business and think the Co-op is getting away with not paying taxes, make it a co-op, then you won’t have to pay taxes (you won’t get all that profit though either). And yes, I have recieved dividend cheques from MEC, 2 of them, one whilst working, and one after leaving (which went straight back to them in the form of a new bag). Yes MEC is changing, yes the stores are catering more and more to the general public, why? Because the membership is now moving closer and closer to the general public.
All in all, MEC is great, I love it, and miss it, and everyone who visits me from Canada gets a list of things to bring back from MEC.
Hi Bret,
Thanks for the support. I’ve been to some great bike dealers where they’ve really been interested in what I need versus getting me to buy. Regrettably, I was stupid enough to let a bike store on Queen’s street (Toronto) sell me a bunch of components I didn’t really need. I will never go there again!
I like many other shoppers will go to the retailer, which offers great products at competitive prices with good service. When MEC slips on any of these fronts, it’s membership base will go elsewhere. Thank goodness it’s been growing year after year which is one testimony it is resonating in the minds of shoppers.
Cheers
I to am a long time, and for some time disappointed, member of MEC. I prefer to express that dissatisfaction by buying less at MEC (soon to be none) and keeping my purchases, as much as possible, local (West Kootenays).
Many hard working, community based retailers, who contribute much to our local rural communities, find they are driven to match MEC prices, a difficult situation when they don’t enjoy they tax status or purchasing power MEC does.
MEC’s endless pursuit of growth in expanding numbers of massive stores, and though catalaog and on-line shopping, is much more akin to the savage retail strategies of Big Box retail then to the co-op values it once engendered. And MEC contributes nothing to our local communities, or local employment while it sucks the money out of them, contributing to the undermining not only of small, local businesses, but of communities. There is an ethical question in this aspect of MEC;s business that the Board and membership should consider.
Hi Kel,
Thanks for your opinion. MEC has both a positive and negative impact on local communities, which is talked about throughout this blog and elsewhere.
To be honest, I support your “shop according to your conviction” perspective even if it means not buying anything from MEC (and paying my salary). It’s legit and I do the same with some of my shopping habits around Vancouver.
What I’ve noticed is that the world is changing fast around MEC, the outdoor trade and the Canadian market. MEC has adapted to that change and guess what, more members are joining, sales are up and more dollars are returned to the local community or to preserving Canada’s natural heritage. This is not an in-your-face rebuttal. Rather its more an observation that as much as many/some of MEC members don’t like the direction MEC is going, the majority do.
The heart of ethical sourcing is shop according to conscience. You are, which is great, in an ironic way.
Cheers
I was agnostic when I went to look at the new bikes yesterday but now Im not. If MEC doesnt want to pollute the planet, how does it explain that prominent rack of ridiculous “fixies” with the blue wheels it is selling? You could have done something original and important. Instead you’re just jumping onto the bandwagon with the same trendy crap the most cynical corps are peddling — about three years after the trend peaked. The rest of the line is less embarrassing but uninspired. Pure commodity stuff. It’s sad. At least Wal mart is cheap.
Hi John,
Thanks for blogging. You’re right, retailing bikes and just about everything else has pollution after-effects.
MEC’s line of bikes may not suit you. That’s OK. The most important thing is that you’re doing your bit with your fav bike to reduce our overall dependency on carbon based transportation.
MEC’s bike line will appeal to some. And whether we buy a MEC bike or not, each time we cycle, we’re winning the war against global warming.
This is the battle MEC wants to fight. And this is the war WE need to win.
Final note: if anyone thinks a discount chain bike is comparable to a MEC bike please think twice. Check the components, frame and performance. If the ride, quality and durability of the bike MATTERS, you will be pleasantly surprised with MEC. And if you ain’t having bought and ridden the bike, you can always return it. Now tell me – What does the discount chain offer!
I have been MTB shopping for my 10 yr old daughter for the past ~4 months and have been sorely disappointed with local (Surrey/Delta) bike shops. Their prices are high and selection sparse for kid’s 24″ wheel bicycles. So MEC’s 24″ Ace kids MTB was a very welcome sight and I’ve already ordered one.
The local bike industry does have a protectionist feel IMO. So the reaction to MEC carrying bicycles is predictable. Note to local bike retailers: stop nickel and diming for small items/parts, and I may drop in more.
Hi NJC,
Thanks for the feedback and support for MEC bikes.
cheers
Hi HC,
Quote: “One of the reasons why MEC is getting into bikes is because our members are asking for it.”
MEC bringing in bicycles does not make sense! I live near a small bike shop and get all my parts and repairs done at this place. I won’t be supporting MEC decision on creating this new department. Why does MEC feel that they need to diversify into this sector?? It doesn’t need to be happening.
I agree with J5,
” as a member that’s what I want ”
I was raised in Vancouver as an MEC member, though in my childhood we didn’t shop there exclusively. 3 Vets, Taiga, and a small group of other retailers in the same area were all great shops offering good quality (this is not to suggest that we did not also shop further afield!). 25 years later, I have my own shiny MEC membership yet I still shop around. Dollars are my voting ballots in the STV system of marketplace life, and mandates are rather short-lived.
I’m also not happy with the direction MEC has chosen, but I have to weigh my options. As has been illustrated in previous responses from HC, the price disparity between MEC and other retailers is often a gaping void. I don’t mind a small difference in pricing, but the bike tube comparison remains a valid point. What consumer gladly pays a 50% premium for knowing that their dollars have gone to support local business? I won’t, and as a consequence the majority of my minor bike fixes are done with MEC parts. For serious work, I head to a specialist.
This isn’t meant as a “shut up and vote with your $$” kind of rebuttal to the overwhelming negativity on this blog, rather it’s to point out that MEC is not going to knock over every bike retailer in the country. There will be sad losses, others will re-tune their models, and all of this will take place according to the ebb and flow of the consumer ballot system.
It seems sadly hypocritical for many folks here to love their small retailer, and indeed the small-guy history of MEC, while they flay the current image of MEC. Should we not celebrate the successes of a once-small company which has grown, through the ballot system, into a healthy and vibrant national retailer? And certainly, as criticisms do arise, they can be put forward with a touch of perspective – MEC isn’t the only nasty, predatory retailer to have discovered the internet.
Hi Drew,
I appreciate your views.
There are big challenges ahead for MEC. It’s traditional membership base (affluent, educated, active and largely anglo/franco consumers) is aging while its future/potential membership base has become less white, less outdoor focused/more sedentary, and more urban oriented. What this means is if MEC doesn’t evolve it will become irrelevant.
Before joining MEC, I worked for Canada’s largest retailer. You know it. It’s been around for 350 years and was privatized by an American. Anyways, this retailer dominated the market until the 1980′s. After that it struggled for relevance (and profits).
This is a clear lesson for MEC, which is being understood internally.
Thanks again.
I was wondering if MEI had plans to expand into the Okanagan region of BC ?
It seems that Kelowna would be an ideal location in lieu of the number of outdoor activities being offered and the hundreds of thousands of visitors/cyclists/campers/boaters/outdoor enthusiasts to the region each year.
I have a few questions regarding MEC’s bike sales:
Does MEC do retail sales of components that it purchases at manufacturer prices? As I understand it, there are lower prices available for manufacturers than retailers/distributors and it is fairly easy to sell these components at retail instead of on complete bikes.
How does MEC purchase their bicycle accessories? Is it through the same channels of the local bike shops (distributors) or is it manufacturer direct or something else?
Not bike related, but the taxes issue is troubling to me. MEC is a all grown up now (revenues are significant, and a large portion of the marketplace in many of it’s sectors), the membership required is a bit of a token gesture to the co-op ownership model (umm, pay $5 to save $20 -OK!) – it’s time to stop shirking your contribution to the canadian safety net (not to mention competing fairly with the other retailers).
I thought it would be out of support that I revoke my membership, but this tax issue may be it. I can’t really support an retailer that doesn’t contribute to the tax base and local economy.
Yes they do. MEC has been talking for years about opening stores in Kelowna, kamloops and Prince George. They have discussed this at their AGM’s. The models mentioned in the past have been catalogue stores (like the Sears model) or satellite stores like North Van.
If there is money to be sucked out of a market, MEC will be there.
They need to start thinking about ethical selling!
To answer some of your other questions re bike and accessory purchasing at MEC.
No, MEC does not buy all of its accessories through the same channels and distributors that regular bike stores do. There are authorized distributors for most of the product that you see on bike store shelves. Those distributors generally have exclusive rights to sell that product in Canada. Those arrangements come with responsibilities for warranties, achieving certain sales volumes, marketing, warehousing and so on. All of that, creates and keeps, jobs in Canada.
Many of these distributors choose not to sell to MEC because the product is meant for the independent bike shop market (not big box) that can offer the type of expertise needed to sell that type of product. So, what MEC does, is an end run around the Canadian distributors and retailers and buys that product from “grey market” distributors (unscrupulous distributors in other markets not authorized to sell in Canada). This of course undermines what the Canadian distributors do, piggybacks their marketing and costs Canadian jobs.
But it doesn’t end there. MEC then uses the brand name product that it sources through grey market channels to further undermine Canadian distributors and retailers by discounting that product. Why? To drive the sales of their own brands in other product categories like MEC clothing and MEC bikes. Just like in the grocery store with cheap milk and eggs (always at the back of the store) they use the well known branded product to convince you of their lower prices and then charge more for the product that carries the MEC logo that carries high profit margins. Nice eh?
As far as bikes go, MEC buys those direct from third party factories in Asia. MEC hired a guy that used to work for Rocky Mountain. That guy “designed” (read chose frames out of a catalogue) picked parts to hang from those frames and then had the factories make those “custom” MEC bikes.
So unlike other bike companies at MEC there is no engineering department, no industrial design department, no graphic design department, no product testing lab, no bicycle advocacy department, no factory, no marketing department, no dealer service department, no customer service department, no warranty department, no racing teams etc etc.
Virtually all of the things that go into making and supporting a great bike are missing at MEC. Except of course, they have that guy that used to work at Rocky Mountain that picked some frames, hung some parts off them and then had them made in the same factories that some other brands are made in.
So, you should all be asking yourselves, why then, without all that overhead, without a distributor and marketing, why are MEC bikes so expensive? They cost about the same as name brand bikes yet in many cases the name brand product is lighter and better equipped.
So, at the end of the day, we are getting bikes made in the same factories as other brands without all the engineering, testing that go into other bikes and paying about the same price.
Not really the warm and fuzzy industry game change that MEC was promising is it?
MT,
Interesting comments. Probably the best way for consumers to figure out what’s real is to visit a MEC store and test a bike for themselves.
If anyone finds that a MEC bike is really just slapped together by a guy (and retailer) with a pretty face then DON’T BUY it. I certainly won’t and no one at MEC would expect you to either.
However, if you find the bike rides well, priced right, great components and solid service and support, then buy it. And if you’re happy it’s because a lot of talented people worked on this from concept to manufacturing to retailing and after sales support.
Happy shopping in finding the right bike for yourselves.
Cheers
Always interesting how comments here are re framed by the moderator to advance your agenda. No one said MEC bikes were slapped together by anyone.
The point being made was that hiring a guy from Rocky Mountain to order up some bikes from Asia is a lot different than what real bike companies do.
It is folly to assume that a retailer (any retailer) can build a decent bike brand without any of the infrastructure needed to design, engineer, test and develop a bike. Sourcing a bike out of the Taiwan Bike Guide is a hundred miles removed from what a real bike company does and that is why those “real” bikes, to an informed consumer, will always deliver better better value, performance and enjoyment.
The issue for members should be, why, since MEC bikes are created with none of the design, engineering etc overhead and costs involved with delivering a name brand bike to market, are the bikes the same cost?
Just because it has two wheels and pedals, doesn’t mean a bike will perform like any other.