Dick's Sporting Goods 2010 Annual Report Download - page 31

directly ship floor ready merchandise to these distribution centers, where it is processed as necessary. The merchandise arriving
at our distribution centers is allocated directly to our stores or to temporary storage at our distribution centers. Our distribution
centers are responsible for consolidating damaged or defective merchandise from our stores that is being returned to vendors.
We have contracted with common carriers to deliver merchandise from all of our distribution centers to our stores.
Competition
The market for sporting goods retailers is highly fragmented and intensely competitive. The retail sporting goods industry
comprises five principal categories:
•Large Format Sporting Goods Stores and Chains;
•Traditional Sporting Goods Stores and Chains;
•Specialty Stores;
•Mass Merchants; and
•Catalog and Internet-Based Retailers.
Large Format Sporting Goods Stores
The large format stores generally range from 20,000 to 100,000 square feet and offer a broad selection of sporting goods
merchandise. We believe that our strong performance with the large format store in recent years is due in part to our unique
approach in blending the best attributes of a large format store with the best attributes of a specialty shop.
Traditional Sporting Goods Stores
These stores generally range from 5,000 to 20,000 square feet and are frequently located in regional malls and multi-store
shopping centers. They typically carry a varied assortment of merchandise. Compared to our stores, they offer a more limited
product assortment. We believe these stores do not cater to the sports enthusiast.
Specialty Stores
These stores generally range from 2,000 to 20,000 square feet and typically focus on a specific category, such as athletic footwear,
or an activity, such as golf or skiing. Certain specialty stores that focus on a group of related activities can have significantly
larger square footage footprints and be designed as destination stores. In addition, several sporting goods brands sell their
products direct to consumers through their own retail stores. While specialty stores may offer a deep selection of products within
their specialty, they lack the wide range of products that we offer. We believe prices at these stores typically tend to be higher
than prices at the large format sporting goods stores and traditional sporting goods stores.
Mass Merchants
These stores generally range from 50,000 to over 200,000 square feet and are primarily located in shopping centers, freestanding
sites or regional malls. Sporting goods merchandise and apparel represent a small portion of the total merchandise in these
stores and the selection is often more limited than in other sporting goods retailers. We believe that this limited selection,
particularly with well-known brand names, combined with the reduced service levels typical of a mass merchandiser, limit their
ability to meet the needs of sporting goods customers. However, Wal-Mart is currently the largest retailer of sporting goods as
measured by sales.
Catalog and Internet-Based Retailers
These retailers either focus on a specific category or activity or sell a full line of sporting goods through the use of catalogs
and/or the Internet. We believe that the relationships we have developed with our suppliers and customers through our retail
stores together with our growing e-commerce business provide us with a significant advantage over catalog-based and Internet-
only retailers.
Dick’s Sporting Goods, Inc. ¬2010 Annual Report 11