The Subtle Shifts of the REI Co-op

As the annual sale kicks off at the Seattle-based outdoor recreation chain, REI has undergone small but notable changes.

By Allison Williams May 20, 2022

REI, or Recreational Equipment, Inc., stands tall among Seattle's signature hometown companies. Besides Starbucks coffee and Amazon's virtual life, what is more Pacific Northwest than a co-operative that sells outdoor gear? Even as the all-for-one spirit has defined the store—down to the word "co-op" blazed on the climbing wall enclosure at the South Lake Union flagship—the company has emerged from the pandemic with subtle changes.

With the annual anniversary sale underway, many shoppers will also be co-op members, meaning they may have store credit to spend—what's known as the REI dividend. For decades, company profits were partially allocated to shoppers who paid a one-time membership fee; they got 10 percent of qualified purchases back. Once alerted of their dividend amount—what many of us know as the "Oh god, I spent how much last year?" mailing—members could use it as store credit immediately, or wait until later in the year to receive it as cash.

But then came the pandemic. Despite the fact that camping stoves and hiking boots were the only things we could use during 2020's lockdowns, REI did not turn a profit. But members barely noticed; the company gave them their 10 percent store credit per usual. Except this time, it couldn't be turned into cold hard cash.

This March, REI announced that the dividend would be called "co-op member rewards" permanently, ending the cash option. For frequent shoppers, the change is minimal (who could ever wait for the cash-out period anyway?). The company also boosted the one-time membership fee to $30 from $20; it may be 30 times the original $1 buy-in the founders asked for in the 1930s, but that's hardly the most egregious inflation in town. A new slate of perks came down as well, including free shipping, charity donations, and discounts at the bike repair shop.

Things have changed for REI employees, too. Before the pandemic, REI's Kent offices were set to move to a brand-new Bellevue super-headquarters, a personalized campus complete with a blueberry bog and garage door walls to let fresh air in. But after the constructions and layoffs of 2020, they sold the crown jewel of office buildings to Facebook for more than $350 million. The company moved to a dispersed headquarters with multiple sites and remote work.

Also this March, store employees at a New York City retail store voted to unionize, and REI joined Amazon and Starbucks in facing the union question. While the outdoor giant hasn't gone as notably on the offensive as their fellow Seattle companies, an REI company website tries to emphasize the limits and negatives of unions while also noting "We are, at our core, a cooperative." The language shows the fine line walked by a company that slaps a "co-op" logo on everything from Nalgene bottles to sleeping bags.

Though REI saw triple digit layoffs and no profit in the first year of the pandemic, in April it announced a net income of almost $100 million. As the anniversary sale kicks off at the retail flagship, Seattle hikers and campers will be stocking up for summer outdoor adventures—as they have done since 1938, when a group of Seattle hikers first ordered Austrian ice axes in bulk and created REI. Some things (almost) never change.

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