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How’s Business – February 2020

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Welcome to our monthly How’s Business column where we call a varied selection of bike shops across Australia and NZ and simply ask, How’s Business?

With the bushfires dominating our news throughout the summer, for our follow up question this month we asked the Australian stores, ‘Do you think that the bushfires have directly or indirectly affected your business?’

Western Australia

Anna Bull of Avantiplus Kalgoorlie in outback Western Australia said:

Business is slow but steady at the moment. We had a very early Christmas rush. Around September / October we were basically flat out with the customers who were organised and buying early. We offer a service where we keep the bikes right up to Christmas Eve for our customers, whether they’re laybying or fully paid for, often they don’t have anywhere to keep the bikes.

November slumped quite badly. I don’t know if that was because of the Black Friday internet sales were coming up and that there might be some bargains to be had through that. Once that sale came and went, December started a little slow but picked up and we got quite busy again.

January has been slow but steady. Kalgoorlie tends to empty out. It’s like a lot of country towns. People tend to go away for the holidays with their families and when they come back they’re getting their kids ready to go back to school, so that’s where they’ll be spending their money.

Some of them come in because the kids need new bikes for school.

General mountain bikes sell quite well here. People are starting to look at more expensive and better quality mountain bikes, retailing at that $1,500 plus mark. Duallies are slowly starting to take off. We mainly service your every day Joe’s, your mums dads and kids, with a few high end bikes thrown in every now and then.

Bushfire effect

It meant that stock that I had ordered before Christmas… some of it has been delivered but there’s still bits that need to come to us. I think we had four or six trucks that were stuck and couldn’t get across because of the Eyre Highway fires.

That put a bit of a dampener on sales because I didn’t have the stuff that I needed. There wasn’t much that I could do and consumers were pretty understanding that the stock was stuck out on the Nullarbor Plains.

New South Wales

Vicki Moorehead, co-owner of Batemans Bay Cycles on the south coast of NSW said:

It’s definitely a lot quieter than it would normally be. We were down probably 40% before Christmas with the first lot of bushfires. We were closed for the first week of 2020 because the fires were so close to town and there was no electricity.

Mountain bike trails, State Forests, National Parks are all closed. So, yeah… pretty rough!

It’s a big business disaster because hires and demo bikes make up a big proportion of our sales and that part of our business is non existent at the moment. Because the air quality has been so bad, people have not hired bikes.

I don’t think we’ve got a lot of rain forecast on the radar as yet. We’ve been doing our little rain dance and crossing our fingers but it’s still not good and it won’t be good for a while.

The area is now back open to tourists, but it’s limited for us, what tourists can do with their bikes. They can’t go mountain biking, so it’s difficult.

The trail behind the botanical gardens has been burnt through. There’s still trees burning and the trees a blowing over, so you can’t ride there. It’s too dangerous.

Further south it’s quite possible we’ve lost the mountain bike park on Maulbrooks Road because the fire has been through there.

Now that the tourists are bike we’re working to promote our hire fleet… hopefully the community and people from out of town rally around. Shopping local, that’s the thing, in the areas that are fire effected, to keep the businesses going. That’s the thing that we need the most.

Victoria

Brad Steigenberger owner of Bicycle Centre Bendigo in central Victoria said:

It’s pretty strong still at the moment, which it’s good. We’re still selling lots of stuff. The continuation from Christmas has been good. We’re selling lots of everything… the gravel category is really starting to take off and the ebike category. We’re just starting our seventh year here.

We’re selling right across the board, e-mountain, e-commuter, e-everything.

Our strongest brand in ebikes is Merida but we’re selling quite a few of the Dyson bikes too, the hub driven ones. We’re selling a couple per week of those.

Bushfire effect

I don’t think so, not here. We’ve been lucky that we haven’t had any fires in this part of Victoria. We’ve had a bit of smoke, this last week or so. It just depends upon the wind direction.

Queensland

Dianne Bennett of Giant Toowoomba in South East Queensland said:

For us business has been good, because mountain biking is growing in Toowoomba. And more and more people are wanting to use ebikes.

I think it’s that time of year. The Christmas period is always a busy time of year for obvious reasons, but now is when everyone is thinking about what they want to do for themselves in the coming year. So I think that’s why we see an increase in the number of people who are looking at performance mountain bikes, performance road bikes… those kinds of things.

It’s more about the individual rather than the family once we move into the New Year.

And everyone’s pretty excited about 2020. Everybody has a positive feeling for some reason. Whether it’s the number, I’m not sure.

Bushfire effect

For us, we’re a long way from where the bushfires are happening. So there has not been a huge impact. What’s been more significant is the drought that’s been happening for quite some time. People talk about it quite a bit and the impact it’s having on business.

But we have a good product and cover such a range of bikes so our sales are always quite good. And we’re always invested in doing a better job all the time. I feel that we’re lucky really that things are going as well as they are, compared to when I talk to other businesses in our area.

I watch things on the internet and you’d think Australia was a tiny country where everyone is impacted by the fires.

New Zealand

Mark Taylor who owns MEC and Hot Cycles in different suburbs of Auckland, New Zealand said:

Business is really good. We’re having the busiest time we’ve ever had. There’s a number of reasons, but without a doubt the biggest reason is the ebike growth.

Ebikes in New Zealand are a massive part of the market now across all types of bikes. We’ve got mountain bikers converting from traditional to E. We’ve got new people taking up trail riding who have seen the benefits of E. And we’ve got a growth in our commuter market in Auckland with the improving infrastructure and the desire of people to get on some sort of green alternative and to enjoy the benefits of riding bikes but without as much work.

And then we’ve got more and more older people to be active and we’ve even got people who traditionally ridden (road) race bikes who want an ebike version to ride with their friends.

So there’s an ebike for everyone, pretty much.

We’ve got two shops. We’ve had Mt Eden Cycles (MEC) for 16 years and sold Specialized bikes from day one from that store. About five years ago we bought an established store called Hot Cycles and converted that in to a mini MEC but it still operates under the Hot Cycles banner.

The two stores are about 15 kilometres apart. It’s obviously a bit more of a challenge running two stores but we’ve got systems that operate seamlessly across the two stores, which are identical in terms of point of sale and stock, so we can move our staff between the two stores to help out. We run all the same procedures and systems. Any disadvantages are far outweighed by the advantages of more size and volume.

In terms of bikes on the floor, 90% at least are Specialized. We do dabble in quite a bit of other stuff, but it tends to be on an order basis, because of the history we have with those people, more than anything else.

Adelaide Hills

John Bishop, owner of Bicycles Mt Barker in the Adelaide Hills said:

Christmas was down a little, but considering what happened with the fires in the lead up to Christmas, we got off lightly I think. Compared to what happened to the community up here and to some of our customers, to be a little down in trading was like a minor detail compared to what they went through.

I have noticed that there’s more concern regarding the price of bikes. People are a lot more price conscious. I think it’s a general lack of confidence in the economic conditions or in the country in general, is making people more cautious.

As far as the mix of bikes goes, we haven’t had a great shift. We haven’t seen a big surge in ebikes like many shops are saying they have. We’re selling a few, but it’s not a big deal for us, despite the fact that we’re stocking a big range of ebikes.

Our sweet spot price for all bikes is around $700. That’s the medium price mountain bike and things like that. It’s because we’re in the mortgage belt. The new, fast growing area where people are in their first few years of paying the mortgage and they haven’t got a lot of spare cash.

Bushfire effect

Obviously it did have an effect. The lead up to Christmas was good, the laybys were good, but when the really hot weather hit and bushfires started the last week before Christmas which is normally our biggest week of the year, it was flat.

The fires came close enough to our shop. They came to a town not far away called Woodside and we heard on the radio that the fire was coming towards Mt Barker. Fortunately it didn’t get over the freeway but it was quite concerning.

We’ve also had Fox Creek which is a major mountain bike park near hear, closed because of fire damage and I’ve heard it won’t re-open for a year or so because of the danger from falling burnt out trees.

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