New MEC store on Vancouver Island spells good news for company, shoppers: retail analyst

Dozens of shoppers lined up for the grand opening of a new Mountain Equipment Company (MEC) location in Nanaimo, B.C., on Saturday — some of them even camping overnight to be first in line.

Standing near the front doors with a group of friends, Maggie Kennedy said she staked her place in line at 8:30 p.m. Friday.

She's thrilled to have a MEC closer to home.

"It’s really convenient because I work in forestry and I go to school for forestry," Kennedy said.

The mid-Vancouver Island location is the store's 24th in Canada, and its second on the island — the other one is about 110 kilometres south, in Victoria.

"Outdoor equipment and camping equipment is something I’m always in the market for,” she said.

MEC CEO Peter Hlynsky says expanding to Nanaimo was a no-brainer for the company.

"Nanaimo is the gateway to the outdoors on the island," he said among throngs of shoppers on Saturday. "For me growing up, it was always the place where you started to get out to all the places on the north and central coast."

Canadian ownership

Retail analyst and instructor David Ian Gray says the expansion is a good sign for the Canadian retailer.

In 2020 the company was sold to U.S.-based Kingswood Capital Management after facing financial difficulties, which led to the dissolution of its original form as a consumer-owned co-operative. Many members described the move as a betrayal.

But earlier this year MEC came back under Canadian ownership when it was bought by a group of Canadian investors led by Canadian retail pro Tim Gu.

"I think it's important in the Canadian landscape as a Canadian-owned entity," Gray said.

"The fact that they're expanding is a good signal that rather than retreating and shrinking, they're actually thinking about growth.”

Gray says MEC has found the mid-level outdoor recreation retail space is less crowded than it was before COVID, in large part because of the problems that came with peak demand followed by a long decline in business as people no longer needed or wanted as much new equipment.

Major retailers like Atmosphere, owned by Canadian Tire, recently closed as have several locations of the French-based Decathlon stores.

That put MEC in a good position for growth in that market, Gray says.

"I think the opportunity for MEC is more that at some point we'll get back to a certain ongoing demand for good value, good quality outdoor gear," he said.

A growing market

Gray says smaller retailers in the region don't necessarily have to worry about the retail giant.

He thinks a healthy retail ecosystem includes entry-level stores like Canadian Tire, mid-point retailers like MEC and smaller specialty stores that can cater to niche markets.

In Courtenay, another 100 kilometres north of Nanaimo, Ski Tak Hut partner Jade Keene agrees.

Keene says he hadn't given much thought to the new MEC in Nanaimo, partly because the 50-year-old store has a strong customer base. But also because there has been so much growth in the outdoor recreation market on Vancouver Island.

"There's never been more people on the island who want to get outside and play," he said.

"That new growing demographic on the island definitely just creates more opportunity for these local businesses like ours — like local bike shops and the kayak shops, and like MEC."