Consequences of Ceasing Ammunition Sales by Retailers: Gains and Setbacks
In November 2019, the National Instant Criminal Background Check System (NICS) conducted a total of 2,574,752 background checks, marking a significant figure in the firearms industry. This data, an estimate based on FBI data, indicates a 1.4% increase over the same period in 2018, with an estimated 1,423,869 firearms sales.
The increase in sales was not limited to one particular retailer. A CivicScience survey found that 29% of U.S. Walmart shoppers are more likely to shop in Walmart stores due to the changed open carry policy. Walmart, which controls about 2% of the nation's firearm market and 20% of its ammunition market, saw a shift in its ammunition market share after deciding to stop selling handgun and assault-style ammunition following two shootings in its own stores.
However, the retail giant, Dick's Sporting Goods, and Walmart reduced the retail availability of guns this year by limiting or eliminating firearms and ammunitions from their retail floors ahead of the holiday shopping season. Dick's Sales rebounded last quarter after its decision not to stock certain kinds of firearms.
While Walmart and Dick's Sporting Goods made changes in their firearms policies, other retailers like Bass Pro Shops, a privately-held outdoor retailer with 184 stores including Cabela's locations in the U.S. and Canada, continue to be one of the more dominant players in the firearms industry.
Mark Lipton, a graduate professor of management at The New School, suggested that reputationally, there's value that balances out the lost sales for the product they're taking off the market, and for the pro-gun people who are boycotting, he doubts how many hundreds of dollars a week they were going to leave there anyway.
Industry analysts expect that December 2019 sales will continue to be high in the firearms category, with Greg Portell, lead partner in the global consumer and retail practice of A.T. Kearney, stating that firearms are a challenging category for general market retailers. Despite the challenges, Portell expects the shift of holiday firearms volume to be very advantageous for Cabela's and Bass Pro.
Yablon, another analyst, expects that Cabela's has already derived any benefit from decisions made by Dick's or Walmart to, for instance, stop selling assault weapons or other firearms. Lipton, on the other hand, believes that guns represent a somewhat larger percentage at Cabela's.
It's important to note that there is no information in the search results about which company reported the highest firearms sales on December 1, 2019. However, if past years are any indication, December sales will continue to be high in the firearms category.
In Q3 2019, Dick's Sporting Goods reported a same-store sales increase of 6%, its highest comps gain since 2013. Dick's CEO Ed Stack said on a Q2 2019 earnings call that the company is enthusiastic about the three main categories of its business: apparel, footwear, and hard lines.
In conclusion, while some retailers have made changes in their firearms policies, the industry continues to see high sales, with analysts expecting December 2019 to be another strong month for firearms sales. The shift in sales from companies like Walmart and Dick's Sporting Goods may benefit other retailers like Bass Pro Shops and Cabela's.
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