How’s Business? February 2022

Australia and New Zealand

Welcome to our first How’s Business column for 2022. Now that we’ve gone to twice-monthly newsletters, you’ll only see How’s Business in every second newsletter.

With Omicron in full flight when we interviewed these shops in late January, our follow up question this month was, “In what ways has covid been affecting your business, particularly since Christmas time?”

Peter Clayton from Cyclery Northside which has a main shop at Chatswood and a new second location in Belrose, both in the northern suburbs of Sydney, NSW said:

It’s busy. It’s the busiest it’s ever been. We’re overworked and understaffed. There’s a lot of pressure on the service side of things.

No complaints though, it’s all positive.

We only sell Specialized bikes. We do a few other brands of apparel and helmets. But we’re pretty band specific to Specialized.

Here in the northern beaches of Sydney mountain biking has gone crazy. So mountain bikes from $1,500 to $6,000 are on backorder. We may have ‘shoulder sizes’ on the floor (eg XS, XL) but for other sizes, we’re taking backorders three to four months in advance.

I view e-bike and other bikes as two different markets. I group all the e-bikes together but e-mountain bike is another real big market for us here. We can never get enough.

We opened the second location in September last year. We initially opened it because we had all these bikes showing up with nowhere to put them. But when we got through the stock we put in a workshop.

We also opened it up during one of the lockdowns to be able to service all of our customers on the Northern Beaches, because the line was in between the Northern Beaches and our Chatswood store. (At one stage the Northern Beaches was a special isolated zone with restricted travel to and from it.)

We have a lot of customers on the Northern Beaches so we opened the workshop within the LGA (local government area) of the Northern Beaches to serve those guys.

I live on the Northern Beaches as well so I’m quite fond of not getting off the beaches, it’s quite a nice spot! (laughs).

Latest covid impact?

It’s the staff shortages that have been the hardest thing we’ve had to deal with. The close contacts have been the biggest problem. Then they changed some of the close contact rules and allowed more access to people but it’s still… we’ve had a couple of people with covid as well.

I mean, we’ve got quite a large number of people, but you lose four or five of them and it becomes difficult. We’re up around 20 staff.

Tom Guiver from Cyclingo, which has two stores in the suburbs of Hobart, Tasmania said:

Business is as good as it can be, with the usual complaints about stock levels and not getting stuff on time.

We’ve opened a second store, which was actually planned before covid, but that just cemented the idea as being a good one. So now we’re running a store in South Hobart, which is the original one, and we’ve got one on the eastern shore (of the Derwent River) as well. Both are tracking really well.

We had an extremely good year in 2018. We got to that level with one relatively small store in South Hobart. We hit that ceiling where we either had to expand, because we couldn’t physically fit any more stock and staff, otherwise we would be tripping over each other. Or the opposite, which we didn’t want to do, to contract and take on less work.

We decided to look around for a warehouse and found one pretty quickly. It’s now a duplicate store with bike sales, P&A sales and a fully set up workshop in both stores.

Our brands vary between the two stores a little bit, but there’s a lot of cross over. We do Kona in both stores. We do a lot of Santa Cruz, Yeti, Transition, Evil so we’ve got a good core of brands. We don’t do DHaRCO clothing in South Hobart, just on the east side, for a point of difference, but that may change over time, depending upon what stock levels from brands are like.

We specialize in mountain bikes. We do some gravel and touring stuff through Kona. We do a lot of custom builds and suspension work as well.

I bought the shop as a going concern seven years ago, but it was in that original location about eight years prior to that.

It wasn’t a deliberate move when we bought the place. I was transitioning out of a full time bike mechanic and workshop manager role at one of the stores in Hobart. I wanted to move on in my own direction.

Then the next year everything started getting this crazy momentum that I hadn’t foreseen. Obviously with the opening of Derby (MTB park), more tracks opening on Mt Wellington, we saw this massive uptick in mountain biking in Tassie.

It wasn’t like I had a crystal ball and saw it coming. It was extremely good timing on our behalf, almost accidental, but it couldn’t have been better. The average spend on a mountain bike in our stores is astronomical now. People are more and more willing to spend money on good product. For a complete bike our average is around $8,500 to $9,000.

Because of the brands we sell, we really only have access to two brands that do e-MTB and they don’t bring many in. So whereas a lot of shops will do a full swing (reversal) ratio wise of e-mountain bikes to analogue bikes, we’re the opposite. We might only sell five or six e-bikes per year. Santa Cruz just can’t bring enough into the country and likewise with Yeti with their new one. So we’re pretty limited in what we can get.

But what we can get, sells. So we could definitely do bigger numbers. We just don’t have the availability.

I think it would still be growing for us overall, but just trying to get product at the moment is making it slow down a little bit. I was looking at the numbers the other day. We’re definitely still on a slight upward trajectory, but I’d almost call it a plateau.

It’s hard to say really because the last two years went gangbusters, so the data is skewed.

Latest covid impact?

Being in Tasmania we’ve really only experienced the numbers of cases and having to wear masks inside since December 15th 2021. The main thing we’ve seen is a bit more of an uptick of national tourism coming through.

We don’t offer hire bikes. We haven’t for a good couple of years. But the enquiry is definitely there for that. Because we’re a high end store with a reasonably good following nationally, people still come in just to check the place out.

Griff Moore, from Uni Cycles on the campus of the University of Queensland at St Lucia in the suburbs of Brisbane, Qld said:

It’s very good at the moment. Most of the students that we serve are on holidays but the workshop’s been busy as!

Sales are a bit slow at the moment but the repairs are keeping us busy.

I just to work for Jeremy and Gavin (previous owners) on and off for 10 years while I was racing. Then I went off and did financial advising. They gave me the opportunity to buy it last year and I thought, ‘Yep! I’ll take it.

Jeremy and Gavin are still here and we’ve got two other mechanics.

We moved down to where we are now in 2009. This shop is about 56 square metres with a bit of space outside. We can generally store about 20 bikes inside. We just carry what the students buy, which is helmets, locks, lights, tubes – we don’t carry much in the way of clothing.

Generally just hybrid bikes, Trek FX1, Avanti Giro, around the $600 to $1,200 mark. We do road bikes but there’s more students who just like easy bikes to ride.

We rarely sell an ebike. Maybe one a month.

Latest covid impact?

There was definitely a lot less people around the university, but the workshop is chockers. When I bought the bike shop (in mid December 2021) I thought, ‘I’ll write January off’ because of covid, but it has been consistent. Business has been good, considering that Omicron’s been kicking us.

Ash Hall of Ash Hall Cycles in the northern Victorian Murray River town of Echuca said:

Extremely busy. Lots of repairs. We’re a bit of a tourist destination over the summer, so lots of tourists with lots of bikes.

We’ve been pretty much flat out through January with lots of servicing but still a few new bikes going out the door.

We’ve had reasonable stock until the past few weeks when it’s been starting to dry up. We’ll start to see more stock in March, April, May. But we’ve had a really good run. We had a lot of stock coming into Christmas. We rolled the dice and ordered in heaps and it paid off.

Our main brands are Trek, Specialized, Scott, Focus and kids brands like Mongoose. Trek would be my main brand now. Specialized used to be my major brand but supply has been tough with them. I’m pretty lucky here in Echuca that I get a choice of brands.

We’ve had a record 2020 and a record 2021 so we’ll see how 2022 goes.

Our bike rack sales have gone through the roof in the past few months. People who bought bikes, now they want to travel a little bit, they’re coming and buying racks. I haven’t tracked it but I definitely know that we’re ordering more racks every week. It’s good that people are actually going to use their bikes that they’ve bought.

We always see families come every year with bikes on their cars but I’ve seen a huge increase. It goes to show that people are changing the way they travel and what they do on their holidays, which is good for the industry.

Latest covid impact?

Since Christmas, foot traffic has been a little bit lower. I hear in town a lot of businesses have had to shut temporarily.

It hasn’t affected us, we haven’t had to shut. We’ve been fine. None of my family have come into contact with anyone, but I know a lot of business that have had to shut for a week, even twice.

Will Arnott from My Ride which has stores in Belconnen and Woden, suburbs of Canberra ACT said:

It’s really busy. Flat out. The workshop’s pretty much full throttle all the time, booked out a month in advance. We have a constant stream of people coming through the door.

Our shop floor is fully loaded. We’ve got two shops here in Canberra and Sheppards support us pretty well. Everything from kids bikes, low end bikes, commuters and recreational bikes, all the way through to high end road and mountain bikes.

I think it’s a bit hit and miss with shops that are doing good and shops that are struggling a bit. We keep on top of our orders and make sure we’re ordering far enough in advance to keep the shop floor stocked. It’s the same with the workshop. We’re constantly looking for places to get parts from to make sure we’re got everything topped up here so we can keep bikes rolling through.

E-bikes is the biggest gap. We’ve got a few, but not as much as we’d like. E-mountain and e-commuters are the most popular. We might have one or two bikes in each shop.

Latest covid impact?

It’s just shipping really. In terms of the business itself, it’s not really affecting it. Since covid started we’ve been flat out and the biggest thing that affects us is just getting stuff to the shop. But that’s more of an international shipping problem.

Apart from that, here in Canberra we’ve been pretty fortunate to be able to stay open the entire time. I don’t think any of us has been sick and if someone has been a close contact and had to isolate, because we’ve got two shops, we’ve enough staff to shuffle things around. Our store managers do a really good job with that.

Shane Collett from Pedal Project in the city centre of Wellington, the capital of New Zealand said:

Since covid it’s been pretty awesome, just like everyone, I’m guessing. It’s just getting stock and the time to get stock that has been the biggest issue, but apart from that it has been great.

We used to be half-owned by Kiwivelo Auckland and we bought Vanessa and Scott out about 2 ½ years ago. We changed our name 1st June 2020, just after our lockdown in New Zealand.

Business has been really good since we changed to 100% Wellington owned. Wellingtonians like to know that they’re dealing with Wellingtonians in business, not Aucklanders in business.

They love it. Things are good. It was a good investment, looking at it now, but it didn’t seem like it when the whole country was locked down for five weeks.

We mainly do top end stuff. We only start around the $1,000 mark. We don’t do children’s bikes – we order them in for our customers but we don’t put them on the floor.

Our shop is only a little shop. So we just have lots of nice stuff.

The hardest things to get at the moment are e-mountain bikes. Gravel bikes are another category that has taken off in New Zealand.

Pretty much when you have a look it’s between 10 to 14 months between when you order and when you receive stock at the moment in New Zealand.

We did some really good ordering and got lots of stock. We’ve done quite well. We’ve got orders all the way through to 2024 for bikes from some companies. Hopefully, I haven’t ordered too much!

Latest covid impact?

Covid in New Zealand at the moment is ok, but we’ve got the ‘cron’ here now so we’ll see what happens. We’re probably going to catch it, so we’ll have to isolate. I think it’s two weeks in New Zealand – who knows what’s going to happen.

If we’re anything like NSW or Victoria it’s just going to go through in a couple of days. We’ll just see how it goes. Nearly all my friends in Australia know someone who’s caught it.

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