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Will GNC Survive as a Brick and Mortar Chain? (article)

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Will GNC Survive as a Brick and Mortar Chain?
By Christian Duque, June 29th, 2020




Let’s cut right to the chase as opposed to spending half an article trying to rearrange the deck chairs on the Titanic. When it comes to business, change is inevitable. You either evolve or you get left behind. Sometimes companies, particularly large ones, can defy changing times and keep it business as usual for the indefinite future. This is a way of maintaining an internal status quo, while ignoring the larger one at play in the marketplace. There’s a variety of reasons why this might be more suitable than scrapping old ways of doing things instead of teaching an old dog new tricks.

When it comes to vitamin retailers, GNC is the king, they’re the biggest, they’re the ones with the deepest pockets, and at one point in time, they were so big they made their way into mainstream America, as well.

They’ve always been mainstream with regards to having storefronts as standalones, in plazas, and in busy malls, but at one point they had a deal where they were inside thousands of Rite Aid drugstores; it’s like you had your very own mini GNC outlet within a separate store. That’s big leagues!! The problem, however, is that GNC didn’t see the bigger picture. When the internet hit, online shopping was very limited. When megasites like Bodybuilding.com and the like started to corner a substantial corner of the market, GNC counted its losses and continued on.

As the mega online stores and mega distributors (e.g. Europa) started to see their own models having to change due to the ever-changing market, GNC stayed on course (its course). Finally, as Walmart got more into the supplement game, carrying many of the brands that could only be found at GNC and it’s competitors (Vitamin World, Vitamin Shoppe), GNC still kept doing things as they’d always done them. The fact is, nothing at GNC has changed. Their store model, their promotions, and their way of doing business has remained, largely, the same since the day they started. Their size has let them defy reality, but now, having to make the tough call of closing 1,200 of their 4,000 stores, speculation will run rampant. Will restructuring as a result of filing bankruptcy protection be enough? Or is this simply the beginning of the end?

Consistency is great, but not at the price of being outdated. The GNC store model is tired, it’s old. For starters, the amount of inventory is excessive, the layout makes it as to where almost every inch of the store is filled, and the general vibe is one of clutter. There’s no empty space, there’s no imagination, everything is done to sell, to promote supplements, and to inundate the senses with the various products, claims, and hype. Every aisle and every shelf looks the same because corporate makes sure that each store is consistent. Just about the only thing in a GNC that has any uniqueness, is the register area. The fact everything is always the same, turns a lot of people off too. Also, customers can’t request brands, they can only buy from the companies GNC deems fit. As opposed to courting businesses, GNC puts a world of requirements on businesses that want to sell on their shelves. Most companies don’t even see the benefit to selling in brick and mortar stores, they hate the return policies which often make them lose money, but if that weren’t enough, they have no interest in jumping through all the hoops and getting through all the red tape, when they can sell direct and make more money.

There used to be substantial bragging rights if a company had products on sale at GNC. Similarly, companies used to have a certain level of credibility if they had ads out in all the major magazines. Times have changed. Today, no one buys magazines and it seems, very few people care to shop at physical stores. Whether it’s GNC, one of their large competitors, or even small franchise supplement stores, you’ll be hard pressed to walk into one of these locations, in any state, and find more than 2-3 people on a random day, at any given time. In fact, you’re lucky to find one other person besides yourself. That’s because people, today, value convenience.

What’s easier? Setting aside free time, getting in your car, using up fuel, driving and parking, just to walk into a store and buy protein, then walk back to your car, drive, use fuel, and take more time to travel home – or – buy online?

You could do all that – or – you could go to a website, place your order, pay nominal shipping (or no shipping if you order enough) and do it all from your phone. It’s a no-brainer. And the more people who order online, means the less people who visit stores. Now, look at it from the store’s side. They have to either buy stores or rent them, they have to pay manpower, and they have to keep shelves stocked. If products are six months out from expiration, for example, the store marks them down as much as 40% (to start) and lower as that date approaches. That’s a loss and there are many losses because a lot of the brands that appear, don’t actually sell. Some don’t sell because consumers can get them cheaper online, but some don’t sell because there’s just no demand for them.

If you as the owner (franchisee) or as a general manager see that an entire shelf of products doesn’t sell, you can’t just sell off what you have and order something different next month. It doesn’t work that way. If you’re a GNC, you pay franchise fees and you follow the corporate model. If you think the fine print isn’t enforced, you better think again. Beyond the losses on the sales side and the cost of doing business, many new, potential franchisees, are opting to work with cheaper franchisors. At the end of the day, the few new business owners in this market simply don’t see the curbside appeal of being associated with GNC – it’s not worth the time or money to them. Further, a great many would rather try their on their own. In the end, opening a supplement store is becoming as daunting as opening a gym. Can you make money? Can you be that one exception to the rule? Of course you can, but understand that the odds are stacked against you. And also understand, there are a lot easier ways to make money!!

GNC could switch it up, but they haven’t, and they probably won’t. The truth is, Gold Card savings no longer make people rush to the stores for the first week of the month. People can get better savings than that at Walmart and they don’t need to buy a card, join a program, or limit their purchases to any set days or times each month. What is this 2010? We’re in a whole new world. No one gets excited about stuff like that anymore.

Also, those hard plastic cases … loss prevention or not, they look so silly. Some stores don’t even have the boxes for LP, they simply like to use them to keep the really powerful stuff out of reach. C’mon guys, you’re a GNC, you don’t have anything powerful. No one goes to GNC to buy gray area supps. If anything they go there to buy protein and pre workout powder. Maybe a million years ago when you had the Pinnacle Poppers or the original Jack3d 3d pre workout, but nowadays, you guys only carry goody two shoes supps, so don’t act like you’re carrying anything exotic. Also, the prices.. even if you don’t carry anything that’s actually strong, it seems you never got the memo to lower your prices.

I was recently at a GNC in Kentucky, where you guys had the audacity to charge nearly $150 for a bottle of pills (in the glass case under lock and key,of course). That’s ridiculous!! Who in the hell is going to spend $150 on any supplement today? I’m sorry, but it’s gimmicks like that, that turn a lot of people away.

If GNC changes its model, got a lot more hip with the times, lowered their insanely high bar for businesses to want to work with them and perhaps reexamined their pricing, then maybe something could be done. That being said, the same thing that let them get this far without changing, their size, may also be what prevents them from changing today.

GNC isn’t just a company, it’s very much an empire. Even after closing 1,200 stores, you still have well over 3,000 locations. It’s one thing to keep everything normal, but to effectuate any kind of real, across the board, change, that might be a lot more ambitious than meets the eye. Still, I do think if the company diversified its reach, invests more into online sales, maybe streamlines its brick & mortar model, and revamps its corporate culture, i do think GNC could experience a renaissance. The brand name is worth liquid gold and it’s very much a part of our culture. The question is, what will it do now that it’s bought itself some time?



Related CJM Articles:
CJM Article from >>>> Will GNC Survive 2019?
 

Old RhynoS

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The one in my area closed at the turn of the year. Months before that they changed from being a competitive store to non. With a SK and Popeyes here at that time ( now there is a Boss as well ) no one would go to GNC. I know we stopped as soon as they would not match prices.
 

Zbignew

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Who the hell still goes to a storefront to buy vitamins?
 

warlock

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I don't mind going to Popeye's. In Toronto they are smart and close to high traffic gyms.
GNC?
No thanks went there once I walked asking for something very specific, the salesperson tormented me trying to upsell, them I learned that I had paid 15-20% more.
I will definitely not miss them
 

dan12345595

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GNC sucks first and last time I was in one of their stores buddy at the counter didn't even bother to acknowledge me, Plus everything was marked up by 20% compared to Popeyes, Bulldog or Hercs.

The reason why I enjoy going to a store front is for the person-person interaction, Having a conversation and getting a second opinion.
 
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Harley00

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I was in there today in my area says stores closing on wall ...i asked the teller she said no we arent closing..... i was confused lol

With online markets now i dont think gnc will make it unless they come up with a better online shopping then amazon.
 

Daway

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(yes, I know they're a scam, but they're a semi-successful scam duping people out of good money)
 

Daway

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But in all serious @~Dr Juice~ you hit the mark on this article. I'm not really sure what GNC can do. IMO, the supplement market is approaching saturation based on the number of players that seem to come and go. Those that come and have stayed are around because they can either demonstrate they have the top-notch version of what everyone else has and/or their prices are so aggressive people see it as a deal. MyProtein comes to mind on this front and ticks all the boxes you mentioned. Their Isolate is always on sale and its pretty typical to be able to get a 5kg bag for like $120CAD shipped. Thats kilos, not pounds. Why would I pay so much more for GNC?
 

thinkfree

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I have no idea how ANY supplement storefront does well enough to survive with all the online retailers. 99% of them offer free shipping too and ALWAYS have sales every month so I never pay full online price even. It's just too convenient and much less overhead so the prices are way better.. Unlike clothing stores or places you need to see or try something for size, I can't see how these supplement retailers survive especially with the e-commerce world growing so fast.
 

Lex

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Crazybulk: "LOL! Here, hold my beer..."
lmao.. I thought I was the only one who knew about cray z bulk... their website is so incredibly cringey but I can see how they trick people.. google something about tren or deca or anything related you will likely end up on their website which has somewhat true information regarding those compounds, then at the end its like heres our shitty snake oil products they are literally tren but in a pill please buy 300$ worth of it you will gain 50lbs of pure muscle in a week guaranteed. read the ingredients and its like tribulus plus some vitamins... FUCK OFF degenerate scammers


oh and GNC sucks I wont be missing them. just went into one today thats closing down and their prices after a whopping 10% off still was overpriced.
 

MRX

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I'm a Healthy Planet guy for brick and mortar
iherb.ca and amazon for online
 

Daway

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@Lex I have to admit when I first started researching the supplement game I found that cringe website (and their 5,000 affiliate sites all trying to get a piece of the scam pie) and I was temped to try it. Yea its cringe but it doesn't have that "i was designed by an autistic 5 year old" look that sites like the UGL that is "conquering woman's hearts" has. CB is like the indian "your computer has been infected with a virus let me connect you to my secure server and rape you help you with your problem" scam in that relies on social engineering confidence tricks to get people to buy it. Forunately as more and more people become aware of their tactics they will be a meme in the fitness world the same way indian scammers are in tech support.
 
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Lex

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CB is like the indian "your computer has been infected with a virus let me connect you to my secure server and rape you help you with your problem" scam in that relies on social engineering confidence tricks to get people to buy it. Forunately as more and more people become aware of their tactics they will be a meme in the fitness world the same way indian scammers are in tech support.
great analogy loooool:LOL: very true. I probably would have fallen for their suave looking/written website like many have, fortunately I had already done a ton of research regarding gear at the time I discovered them so I knew it was a load of shit.. was good for a laugh, pisses me off that people have wasted their money though. just read through the 3rd party website reviews. lot of broken hearts and weak physiques.
 
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