REI Co-op reported sales of $3.8 billion for its fiscal year and invested over $6 million in 74 ... [+]
REI Co-op has given nearly $270 million back to the co-op community including investments in its employees, nonprofit partners, the planet, and society as a whole. “People here are committed to our work and they want their work to matter. We are very focused on the impact on the world,” said Eric Artz, president and CEO of REI Co-op in a personal interview. The company closed its full fiscal year with sales of $3.8 billion down 2.4% from the previous year and gave back over $200 million to its over 24 million co-op members.
Sales Miss Due To Climate Change
Ironically, the area where REI Co-op focuses much of its attention and effort was the cause of its sales miss. The 2.4% sales decline resulted mostly by an erratic climate in the fourth quarter. “We were well ahead in sales through the first three-quarters of the year, but in the fourth quarter the industry had a tough time overall due to erratic weather patterns,” said Artz. The winter’s unseasonably warm temperatures impacted many retailers. “The fourth quarter of 2023 was the 3rd warmest in 129 years, including the warmest December ever recorded,” said Evan Gold, executive vice president of global partnerships and alliances at Planalytics. Heavy rainfall led to flooding in heavily populated areas along the West Coast, Northeast, and Southeast, limiting store traffic during high-volume shopping periods in December, explained Gold.
The winter categories such as outerwear, gloves, and snow boots experienced significant weather-driven sales declines, according to data from Planalytics. Warmer weather during anticipated cooler months significantly impacts outdoor gear companies like REI Co-op that rely on cold weather to sell winter goods. “Every state in the U.S. had temperatures above (or much above) normal,” said Gold.
The Planet
The company reduced its greenhouse gas footprint by 6% from its baseline year of 2019 and is 10% down from the previous fiscal year. “The business has grown significantly since 2019 and with our aggressive climate reduction goals, we take this very seriously,” said Artz. The company revenue in 2023 is 21% over pre-pandemic year of 2019 so its reduction of greenhouse gasses is a significant impact on the environment. The company’s long-term goal is to become net-zero by 2050.
For 11 consecutive years, REI Co-op has had 100% of its energy coming from renewable sources. The company’s LEED-certified distribution center in Lebanon, TN uses 100% renewable energy including solar panels on the rooftop, repurposed rainwater, and natural lighting, which demonstrates the company’s commitment to impact climate change.
Creating Fully Inclusive Environments
In 2023, REI Co-op added new inclusive design practices across more than 1,400 brands including its ... [+]
The company strives to create anti-racist and inclusive environments for its employees and recognizes that truly impacting society on a broader basis includes using its multicultural employee base to drive change from the inside out. The company invests in training programs through its Racial Equity, Diversity & Inclusion (REDI) Learning Series. “We recognized a long-term effort was needed many years ago and we had to broaden the definition of getting more people outside,” explains Artz as he discussed the company’s Race & Racism in the Outdoors learning segment.
Since 2021, REI Co-op has secured $4.5 million in federal funding for trails and over $1 billion in ... [+]
Outside in 5
The company launched Outside in 5 in 2023, a mission to make sure everyone in the U.S. lives within five minutes of parks, trails, and time outside. “Enabling outdoor access to everyone is very much about creating more time outside for everyone, especially for the cases where people cannot get outside,” said Artz. There are 100 million people who do not live within a 10-minute walk to a park, “REI Co-op along with its vendor partners and non-profits can help solve the nature gap,” explains Artz.
Global Reach
Partnering with other organizations helps REI Co-op broaden its reach from local communities to global ones. “We engage with over 100 vendors that constantly bring opportunities to us and I have to give credit to our teams and partners for acting on these ideas. It is the power of community, with 63% of our merchandise assortment coming from partners with extended climate reduction commitments,” explained Artz.
The company partnered with Biolite to finance the production of clean cookstoves for 30,000 households in Saharan Africa replacing the more polluting wood and charcoal burning stoves. Biolite, known for its products that are used by outdoor enthusiasts, also provides affordable clean energy solutions for millions of families that live off the grid.
A Trailblazer For Repurposed Goods
REI Co-op was one of the first companies that instituted a process to repurpose used merchandise with its Re/Supply program. “We used to have garage sales in the parking lot of our stores, but when COVID hit, we brought the resale process into the stores,” said Artz. The company now has two stores that operate as Re/Supply stores along with its website offering used products. “Customers appreciate that products have an extended life and the quality of our products is great so reusing is better for the planet and the customers,” explained Artz. The company plans to expand the Re/Supply program across the U.S.
The Commitment To Social Causes Rise Above Profits
The company reported a loss of $311 million in 2023 driven by three factors: continued investments in hourly pay, rewards payouts to its co-op members, and a non-cash valuation allowance. The commitment to its over 15,000 employees extends beyond paying higher wages, as REI Co-op spent over $57 million in retirement benefits and incentives. The company invested nearly $270 million back into the co-op community despite a net loss and sales miss for fiscal 2023.
People, Planet, Prosperity
The company’s impact on its people, the planet, and society as a whole expands beyond the profits that the company keeps. The commitment to bettering the world and being an active participant in a multitude of corporate social responsibility roles keeps the company at the forefront of the industry.
The company added 1.4 million co-op members in the past year and this number continues to grow year over year. REI is a privately held company without shareholders. Anyone can become part owner of the company by joining the co-op. Every year the co-op members receive profits from the company, usually 10% annually of what they spend on eligible purchases. The membership costs a nominal $30 for life. The full REI Co-op Impact Report can be found on the company website.
