Why do retailers of performance athletic apparel have meaningful bargaining power?

The bargaining power of retailers in the performance athletic apparel market is significantly influenced by the relatively low cost for consumers to switch brands. This factor allows retailers to negotiate better terms with suppliers since they can leverage the fact that consumers are not heavily tied to a single brand. If a retailer offers a variety of brands, consumers can easily choose to purchase from a competitor if they find a better deal or a more appealing product. This dynamic means that retailers can exert pressure on brands to provide favorable pricing, promotional support, or enhanced product offerings, knowing that consumer loyalty is not necessarily ingrained.

As consumers can quickly shift their loyalty from one brand to another based on price, quality, or style, retailers hold a stronger position in negotiations, allowing them to amplify their influence in the market. This low switching cost fosters a competitive environment where retailers can optimize their assortments and negotiate leverage, reinforcing their bargaining power within the supply chain.