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How’s Business? February 2021

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Welcome to our first How’s Business interviews conducted in 2021. As always, we called a selection of shops across city and rural locations throughout Australia and New Zealand.

This month’s follow up question was, “Did you notice any differences in your Christmas trade compared to previous years?”

Paul Fitzgerald from Giant Echuca in the historic Victorian Murray River town of Echuca said:

Since April last year it’s been very busy. It’s just been out of control. We’ve been continuously running out of stock. We’ve had very good year as far as getting stock overall, but we’ve had no continuous supply. We can’t ring up and order 50 or 60 or 100 bikes like we normally do. We just get allocations. We might be getting an allocation of 20 a week or 20 at the beginning of the week and 20 at the end of the week, and bang, they’re gone straight away.

I got 18 or 19 bikes on Monday and we’ve got four left (speaking on Wednesday morning). That’s not bad going is it! Between Christmas and New Year we could have sold between 45 and 55 bikes. (extra bikes if they had stock) We got up to about 45 bikes and we stopped counting. People coming in wanting stuff but we just couldn’t supply them.

Giant have been very good in getting me bikes, when they can get them.

Christmas trade differences?

I’ve just done my 13th Christmas and it would have been the busiest, but the hardest.

I’ve got a three shop frontage. When I walked out of the shop at the end of Christmas eve, I did not have one bike on my shop’s recreational side. That part of the floor was totally empty, where there are normally 80 to 90 bikes. That’s a big smackdown, isn’t it?

Christmas trade was not really different. But we’re still getting people in who cannot understand why we haven’t got bikes. ‘What do you mean you haven’t got bikes? You’re a bike shop!’

‘We can’t get bikes.’ … that’s a real problem.

But we’re finding people are being patient and waiting – some are. Some are being very impatient, they want the bike now and we haven’t got it. We put them on a list and if we get the bike, we give them a ring.

We’ve got a number of pages on a list, but some are after obscure stuff that we just can’t get.

Giant Echuca Store Fronts
Giant Echuca

Justin Roscoe of Sticky Bottle in Sydney’s northern beaches suburb of Brookvale, NSW said:

Business is good. Apparel is our strongest sector at the moment given the lack of bikes in the industry and the lack of group sets and whatnot.

We’re doing about half a million dollars a year at cost now in apparel. We’ve got some strong brands and some expertise and we’re building that out by adding more brands all the time.

We’re holding stock and spending time to select good products. You have to have the stock and the depth of size and style. But if you have that people will walk in. They’ll try the garments on. They’ll get good advice around fit and design and then they’ll buy from you.

But you have to have the stock. You can’t order from a catalogue and expect that people will buy from you. They’ll just order online.

We’ve sold a lot of apparel. I didn’t think we’d go that way but it’s just evolved to that point.

We sell Rapha, Maap, we’re just adding Black Sheep now. In mountain biking we have Troy Lee Designs. So it’s quite a premium offering, but a lot of customers come for our advice.

We’ve just moved. We opened just after Christmas. We’ve gone from 60 square metres to 200 square metres with a 150 square metre café in the same building with an open floor plan.

It’s a pretty cool experience for a cyclist to arrive and hang out in the shop. There’s a barbers upstairs… pretty different.

I subleased the café to a really good operator who’s a good friend of mine. We end our shop rides here and have a coffee. We were actually still here having coffee this morning at 8:30. I had to scoot off home to have a shower and come back to work.

We’ve built our business off community and engaging with shop rides.

We actually started in Manly as a shop called the Fixed Wheel. I bought that business 3 ½ years ago now. We moved to Brookvale 18 months ago into an industrial area with more space. I wanted to try a clubhouse idea. So I did a smaller version of the shop we’ve got now, to test the water. So now we’ve got a 400 metre building with the bike shop taking a good chunk of it. It’s a destination. You can come here and there’s fun things going on so it’s interesting.

Christmas trade differences?

We’re not really a Christmas store. We don’t sell kids bikes. We’re not selling cheaper bikes. Our trade was definitely up in revenue, but it’s a growth story for the business generally because we’ve scaled up the size of the store.

Brendan Bursell of My Ride Woden, a southern suburb of Canberra, ACT said:

Business is good. The bike industry has gone pretty ballistic since covid hit, but we’re starting to see… I wouldn’t say a plateau, but I guess a little bit of calmness now. Stock availability is getting more uncertain.

There is stock, but there’s also going to be a bit of a lag in between I guess the next couple of months for key models. However both my stores – I’ve also got one at Belconnen – we’re fully stocked. The floor’s full of bikes. Our warehouse is full of bikes. We’re pretty happy. I guess we’ll just see how the next two months pan out.

Our workshops are going mental. We’ve still got a good range from 12 inch kids bikes all the way to I’m building a $14,000 top of the range carbon ebike right now.

We’re pretty fortunate I think compared to a lot of other stores in Canberra. We partner with a good supplier. There are a lot of stores who unfortunately don’t have the best suppliers backing them and that’s affecting stock availability and how they can perform for their consumers.

But we’re doing well. There are no complaints here. We haven’t been this busy in quite some time and we haven’t had this much stock on hand as well coming into the start of the year for past years.

We pre-empted with our supplier what could happen and we’re sitting pretty at the moment.

Our main supplier is Sheppards. They’re going great. I think you’ve got two suppliers doing best in Sheppards and Advance Traders.

Christmas trade differences?

I think everyone was hoping that Christmas was going to be crazy busy because the whole year had been crazy busy. But for us, it was a fairly consistent Christmas. We were busier than the past two years, but to be honest with you we were busier in August/September than we were in November/December.

So it was a busier Christmas for us compared to previous years, but it wasn’t the busiest time of year in 2020 that’s for sure.

Darren Cuthbertson of DC Cycles in Timaru on the south east coast of New Zealand’s South Island said:

Business is quite tough right now. We got through Christmas ok even though it was down I reckon about 25% to 30%. But now with the lack of bikes to sell we’re really struggling.

All the ETA’s (estimated time of arrival) kept getting pushed out. If we had bikes, we’d be going good, because we’ve got so many enquiries. The good thing is we’ve got so many people who call when bikes do come in, but it’s just waiting for them, unfortunately.

We mainly do Merida and Marin with Norco thrown in there now too. We’re really good for families. Kids bikes towards Christmas we go really well with. At this time of year the $400 to $1,200 bikes usually go really well, but that’s the area we just can’t get the bikes in at the moment.

We do quite well with road bikes as well. Timaru is quite strong for road cycling. We’ve got Shane Archibold who riders the World Tour (for Deceuninck Quick-Step). He’s from Timaru. Mark Ryan, Olympic Medallist, he’s from Timaru as well. It’s a pretty good stronghold around Timaru and South Cantebury.

So we’re bigger in road than a lot of other shops but our main market is still family bikes.

I think we’ve got to be a wee bit proactive. We need to work out what we’ve got coming. We’ve got a lot of stock ordered. It’s just waiting for it to get here. We may looking at running a scheme where you pre-book the bike, put a deposit down, then you’ve got it locked in. We just need to give the customers a reason to buy here, I suppose.

Christmas trade differences?

Normally we’re all over the Christmas trade. Bikes for young teenagers and things like that. This year we had a lot of people walk in, but instead of putting a bike on layby they’d walk back out and buy somewhere else, just purely because we couldn’t get the stock.

In the end I think we kept 90% of our customer enquiries happy but it was that $400 to $1,200 price point that we were really struggling with and where that downturn happened.

Chris Haggarty of the Chain Gang in the south western suburbs of Brisbane, Queensland said:

Business is actually trading relatively well, but we’re hindered by the shortfall in stock availability.

I’m a road, triathlon-specific shop. I don’t do children’s or family bikes. Just high-end road.

I’ve been here for 14 years. This is my fourth year since I changed over. I sold my last kids bike in 2016 and my last mountain bike in 2017.

Over the past year obviously we had a massive influx of people keen to get into cycling but they were generally in that family market.

The higher end market was still trading quite well. Triathlon went to ground quite a bit with all the events being cancelled. The road cycling side actually picked up and sales were quite ok. Trade was actually down about 20% (overall) but I had an incredibly good year the previous year so it was not a massive hinderance, business was running fine. I was actually flat out all year.

I definitely had more pre-orders than most years.

It’s only in these recent months and coming back from Christmas that we’re realising that a lot of the stock has already been sold through for the 2021 season and it’s not even the end of January.

The chain of supply, with Italy in particular with the European bikes we sell and throughout Taiwan… I’d say 2021 is looking more of a challenge than 2020 was.

Last year I was seeing a lot of families trying to use my business and workshop servicing, which I don’t actually offer to that market.

Christmas trade differences?

Because I’m a high end road shop I actually don’t work over Christmas. I closed on 4th December and opened on 11th January, so I had a lovely break!

My experience has been that Christmas is very much about family and kids bikes. Now that I’ve drawn the line in the sand and become just a high end road store, it’s not a Christmas purchase.

Wayne Chapman of My Ride Hobart in the inner southern suburb of Sandy Bay, Tasmania said:

To date, it’s been good. We’ve been pretty fortunate from a supply point of view. We’ve got Scott and Avanti bikes from Sheppards and they’ve managed our supply really well.

Demand has been very strong, for a variety of reasons. But we’ve been able to pretty well meet it to date but this year will be interesting from a supply point of view.

We’ve had next to zero covid cases down here, but demand is up because we’ve locked people into the state. My suspicion is that, particularly through the winter months, the fact that other state borders were effectively closed meant that people spent their money locally doing outdoor activities.

Money has been reallocated out of travel into domestic expenditure.

We’re selling more mountain bikes. That’s probably driven by the investment that’s gone into trails and MTB facilities within Tasmania.

E-mountain bikes are the most rapidly growing segment of the business but proportionally in number of bikes they’re still only, probably under 10%, but it’s growing most rapidly of all the segments.

Christmas trade differences?

Not particularly. Because we are in abnormal conditions the months prior to Christmas were particularly strong. December was still our biggest month, but the gap over prior months was less than previous years.

How did you fair over Christmas? Comment below…

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