Between economic uncertainty, margin compression and the chaos of tariffs, outdoor specialty retailers were vulnerable to a long list of challenges in 2025. But the data tells a different story: resilience.
While not fully back to business as usual, outdoor specialty retailers showed stability compared to the turbulence of previous years, according to Gabe Maier, president of Grassroots Outdoor Alliance. Year-to-date figures through November show the group is up 2.36% compared to 2024, when a staggering 65% of retailers were down more than 3%. This year, that number has dropped significantly to 37%, with an equal split of retailers showing growth or remaining flat.
“That’s kind of been the trend since the pandemic,” Maier said in an interview with SESO. “While I don’t think we’re quite back to business as usual, there’s a lot more normalcy than there has been the past couple of years.”
This shift signals recovery, though Maier is quick to point out that results remain bifurcated. The gap between winners and those still struggling is distinct, often driven by product mix — soft goods like apparel and footwear are performing well, while hardgoods like bikes and paddle sports equipment continue to face headwinds.
Maier dove deep into the data, explaining where specialty retail found success in 2025, the lingering challenges of margin compression and tariffs, and the emerging opportunities, such as the growing used gear market, awaiting in 2026.
Are you noticing any patterns among your members? Are certain regions or categories struggling more than others?
Gabe Maier, president, Grassroots Outdoor Alliance: The regional difference has actually been pretty stable. I think there’s a little bit to do with product mix. Very similar to 2024, categories like lifestyle sportswear, running footwear, lifestyle outerwear, and active sportswear are leading. We continue to see hardgoods categories be hit really hard. So any retailer that’s got bike, snow, or a big paddle sports section — those continue to be really tough categories.
For comparison, back in 2018, 41% of our retailers hit in that flat zone, and in 2019 it was 43%. We look to those as kind of a normal dispersion year. We’ve been trying to just reset perception on what normal is, which is probably a healthy amount (of retailers) that are pretty stable, and then you’re going to see bifurcation on either side. We’re not there yet, but we’re getting closer.
What do you see as the major challenges for the retailers that are down? Is it just product mix?
Gabe Maier: While sales are kind of getting back to growth, inflation and the pressure that tariffs have put on pricing are still outpacing sales growth. So margins just continue to get smaller and smaller, even though we’re doing the same amount of business. I would say the uniform theme of challenge is margin compression.
More specifically, within 2025, the vendor community took on a huge bulk of work regarding tariffs. Just the every-week fire drill about new tariffs, new pricing, redoing everything — it was tons of decisions. While the brands took probably the largest hit, that certainly had a trickle-down effect to retailers and created general uncertainty. They were revising their open-to-buy and trying to make sure they had the right product mix in relation to price increases. That felt like the unique 2025 challenge.
Are your members reporting shifts in consumer behavior?
Gabe Maier: We asked this question in our quarterly Outlook Survey. About 24% of retailers said yes, they are seeing a lot of changes due to price increases, and 57% said some or a little. The primary changes observed were customers seeking lower price points and increased hesitancy or consideration time.
However, I do feel like there’s been this underlying theme in the industry where results have continued to beat expectations in 2025, month after month. We’re all still seeing this cloud, but each month (the data) that rolls in is better than expected.
How are retailers pushing back against the expectation of constant discounts?
Gabe Maier: It goes back to channel differentiation. Specialty has always been uniquely positioned for that. It comes with a really straightforward mandate: Provide great service and provide great community.
If you take a step back and look at your business and go, “How do we create a unique experience? How do we support our community? How do we provide a differentiation in the more experiential part of retail?” Because you can buy a water bottle at Walmart and then go buy a water bottle at a specialty retail store, and if done right, you have a very different connection to the same product in both channels. That is where specialty can show up and win.
What are the biggest opportunities you’re seeing for outdoor specialty retailers in the coming year?
Gabe Maier: On a tactical level, succession planning is huge. We still see a group of retailers that are probably within the next five to 10 years planning their exit, and the time to start is now. We’ve had 17 stores transition to new ownership in the past five years — almost 20% of our total membership.
Another growing conversation is used gear. A little over 20% of total retailers have a used gear component to their business. The thing we find really interesting is that within a year, almost all of them have said that it has become more than 10% of their total volume. That’s a meaningful chunk. And in a lot of cases, it hasn’t cannibalized full-price new sales. It’s just brought in a different customer and introduced them to a whole new part of their community. Bridging into 2026, I think that’s definitely a trend that we continue to see grow.
Are there any emerging product categories or activities that you think will see growth in 2026?
Gabe Maier: We asked retailers where they see categories evolving over the next 12 to 18 months. The highest area that retailers said they were planning on expanding their footprint in was gift and accessories. I think those are just kind of those little things that make your store unique and interesting and fun.
After that, it was lifestyle sportswear, running footwear, lifestyle outerwear, and active sportswear. No surprises there. The only additional point is that I’ve heard a fair amount of retailers talking about “squishy shoes” maybe starting to slow down a little bit. I don’t think we’re going to see those necessarily go down, but there’s some indication that they may be flattening.
How are you seeing technology shaping the future of outdoor specialty?
Gabe Maier: A lot of technology advancements are making things more accessible. We have seen companies like Locally latch on to some advancements that make it really easy for a single-door store with limited bandwidth to get their inventory online, have a website that looks really good, and have updated product descriptions.
As we look to AI, there’s such a great opportunity for retailers to lean into using it for social media campaigns, plugging in demographic data, understanding local markets, and obviously reducing some of that administrative bandwidth to be a little bit more effective.
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
