How’s Business – December 2023
Welcome to How’s Business, brought to you by Knog – Australian designed and lighting up the world.
With Christmas approaching, for this month’s follow-up question I asked, “What do you think the Christmas holidays and summer season will be like for you and your store?”
In keeping with this holiday theme, I spoke to a couple of businesses that have a strong tourist orientation. Although six stores in total is always far too small a sample from which to draw definitive conclusions it seems that the cycle tourism industry is holding up better than the general bike industry at the moment, which remains subdued.
Ben Jones of Evolution Biking former ghost town turned famous MTB centre of Derby, Tasmania said:
It’s good. Things have bounced back nicely. We’re based on the tourist trade here in Australia, primarily from the eastern seaboard, but really from all over Australia and New Zealand. We’ve seen good return visitation.
Bike hire numbers are fantastic. There’s a big uptake on e-bikes. There’s a lot of retail out there – a lot of sales. Our sales are still strong.
We sell bikes to customers Tasmania-wide. Our main brand is Trek. We have customers in Hobart, Devonport, that are willing to travel to Derby to purchase their bike. It’s a pretty awesome spot to collect your bike.
We’re also seeing a good update on trekbikes.com.au in the fact that people are selecting us as their dealer, collecting it instore and riding it at Australia’s best mountain bike destination, straight out the front door.
We don’t see a large customer base of people from the mainland, it’s more from Tasmania. We build a good association. We help them have a great time on their trips here and they reward us with purchases.
I’d say sales and hire are about 50/50. I don’t want to give too much away, it’s very competitive here in town! There’s four stores in town. Recently I climbed up onto a rock that overlooks the town and it was amazing to see how many new houses are being built here.
What will Christmas and summer be like?
It will be strong. I see it as being strong – indications say that we’re in for a solid season. It’s solid now. We’re expecting a big summer. We’ve staffed up. We’re employing four mechanics and two retail / admin.
We’ve got a second location where we’re looking at expanding our servicing to include suspension. We want visitors to Derby to have an all-round and be able to get stuff fixed. We want to expand into spaces that are not serviced at the minute, in Derby. It’s something we’re looking at staffing up to take on and also adding workshop equipment.
We’re willing to grow as the market grows. We’re willing to try stuff and if it takes off, then we’ll keep doing it. If the market is not there, we’ll pull back.
Peter Sutton from The Complete Cycle in the southern Adelaide beachside suburb of Port Noarlunga, SA said:
Sales have been a little slow. Even the e-bikes have dropped off a bit at the moment. Repair work is still fantastic.
We’ve noticed in the past 10 days or so there seems to be a pickup in both enquiry and bike sales, but not what you’d expect at this time of year. I put it down to, most of our customers are either 50+, own their own house and do still have disposable income. But for the family people who buy bikes for their kids and that sort of thing – the cost of living is just so high at the moment, they’re struggling for any disposable income.
But it will change. It always does.
Our main brands are Fuji, TEBCO, SE, a few Apollo, the Tuesday brand as well. Breezers, when you can get them, they’re an excellent gravel bike. Blackeye sells very well in the BMX range. It’s BMX International’s generic brand – very good value for money.
My grandson works with me here. He’s 23 years old. I’ve got a great grandson who is eight! (laughs). I turned 80 this year. But I’m still enjoying it and I’m still doing everything I want to do, thank God, so I’ll keep going! I still work full time. I did cut out working on Sunday afternoons for a while, but with Christmas coming I’ve started again.
But I don’t open until 10 in the morning. I go down to the beach for an hour to walk the dog and have a swim. I take the dog for a walk at lunch time and usually get home by 6pm and go for another walk. I’m enjoying myself. It’s no stress.
What will Christmas and summer be like?
I think below average. But hopefully I’m proved wrong.
Jim Hocking from Hocko’s Bike Shop in the outback NSW tourism and mining town of Broken Hill said:
It’s pretty good mate. It’s always good coming into Christmas. We’ve got plenty of kids’ bikes and scooters and skateboards all getting built and sold.
The store has been in Broken Hill for about 30 years, but we took over three years ago. We’re the only bike shop in town. The most popular adult bike here is a hard tail mountain bike. We sell Trek, Norco, Merida and Apollo. Our kids’ range is popular – 12, 16, 20 and 24 inch.
There is a K-Mart but they don’t have a bike department. The biggest competitor used to be Big W but they closed down a few years ago. Pretty much the internet mate – that’s all we compete with. We honour online pricing for anything that’s in stock – we try to match online pricing. Freight’s a bit of killer.
The local town does very well to support us. A lot of them try to shop locally.
Broken Hill has been a bit up and down for the past year. The tourism side is doing really well. The mining side always fluctuates depending on the price of metals, but seems to be pretty stagnant at the moment. So, the town as a whole is pretty mediocre.
What will Christmas and summer be like?
It’s always the busiest time of year. Hopefully it’s trending the same way and we have a good lead up to Christmas.
It is hot, but the young kids, they always want a push bike for Christmas. We get really good kids bike sales and the adults buy the bikes through the year as they need it. They don’t wait until Christmas.
We’ve got about six e-bikes on the floor. They’re not as big a mover as what we hear they are in the cities. Broken Hill’s a pretty small, flat town. You can ride from one side to the other in about 15 minutes and you can avoid the hills. So they’re generally bought by oldies who are getting a bit too old (for a regular bike.)
Dan Mikkelsen from Bicycle Junction, located in the CBD of New Zealand’s capital Wellington said:
Generally it’s been a good start to the season over the past couple of months. I think for everyone since October 2022 it has been a pretty flat year.
In terms of New Zealand we had a pretty wet summer last year, but generally the cost of living crisis… the official cash rate at 5.5% – are all affecting people’s spending habits and we haven’t been immune to that.
Also the oversupply from many of the major brands and a bunch of the smaller ones in New Zealand mean a lot of people are clearing stocks. That’s understandable and just something that everybody works through. It seems like it’s normalising a bit now and we’re looking forward to a roughly normal summer.
We continue to sell strongly in transport bikes, be that electric bikes, touring bikes or cargo bikes.
I would say that the recreational side of things is what has suffered the most over the past year. We’ve possibly dropped back less than other shops, but we notice it in the number of rail trail bikes being sold has greatly reduced. I think a lot of that market are now enjoying the fact that they can head out travelling again.
Whereas when people look at transport bikes, e-bikes, they’re looking at a cost equation of something that can save them money… an up upfront cost, but over time it saves them money and hassle. It is hilly in Wellington, so the electric is an important part of more people riding bikes, particularly ones that are not regular cyclists.
What will Christmas and summer be like?
We’re looking forward to a pretty busy season. We’re also going to get out there and run more again, that we haven’t done so much in the past couple of years.
Just getting out there amongst the public and engaging… we run a variety of events.
We do pop workshops where we show up with donuts and coffee and fix people’s bikes at various spots in the morning as kind of a community service thing. And we do bike rides, family cargo bike picnics. We’ll be doing some beach rides… a pretty full calendar.
Workshop training sessions and bike raves. That’s when we get out there with massive speaker systems and silly costumes and we go and make some noise and take over the city a little bit!
Michelle Sandow, from Pedal Inn Bicycle Garage, in the Brisbane suburb of Manly West, Qld said:
It’s been good actually! (laughs) We have only been here coming up to five years. So we don’t really know what pre-covid looks like. We opened a year before covid started but it was just a workshop.
Over covid the workshop went bananas and our workshop hasn’t really slowed, ever. We’re a little different to your normal bike shop model.
Our workshop is consistently booked out a week in advance, which is how we like it. We have a lot of repeat customers.
Sales are probably a different thing, though. This year we’ve seen more kids getting bikes for Christmas again, which is nice. Last year it was really quiet at this time of year. We’re still selling high end stuff, but not that middle ground. We’re selling entry level and high end.
We sell all types of bikes so when I say high end I’m talking high end road and not a lot of mountain of late. But we do bikepacking so we’ve got custom builds happening on Surly frames and things like that.
What will Christmas and summer be like?
We actually shut between Christmas and New Year. We always have and probably always will. It’s the one time of the year in our area where it goes dead. People generally don’t come to Brisbane for summer holidays. We find that people exit the place, so we shut.
It will be interesting to see what January brings, given that we have noticed a lot of our suppliers and online stores went really heavy on the Black Friday thing. We often see January go quiet because all of the credit cards get maxed and then in January they’ve got to pay them all.
We’re still seeing people that aren’t affected by the correction. The guys dropping 8, 10, $12,000 on a bike – they still seem to be doing that.
Our biggest issue at the moment is 99 Bikes. Up in Queensland our biggest competitor is 99 Bikes. They are just selling bikes at crazy low profit, just to get rid of stuff. So we’re seeing a lot of people… they’re coming in to look at a bike here then we see them later on, on a Merida or a Norco or something like that.
We’ve also had a couple of bike shops close in our area and they have also been just selling bikes for nothing. Obviously we still want to make sales, but we’re a workshop driven store so we can tick along without them.
Ash Grey of All Terrain Cycles in the Victorian Alps about three hours northwest of Melbourne said:
It’s pretty good. We’ve got three stores, Bright, Mansfield and Mt Buller which opens for the summer season this weekend.
We’ve set up a new premises in Bright, in September. Since we’ve opened our new premises it’s been really strong. It’s two or three times bigger than the previous store that we had. We’re definitely seeing improvements in turnover. We’re getting a lot more stock on the floor and a lot more people coming through, checking out the new shop.
We’re keeping people happy, getting bikes fixed and getting them out, so yeah, it’s been really good for us over the last little while.
I’d say it’s probably about a 60/40 split for sales with 60% being tourists and 40% being locals. There’s still a pretty strong local cycling scene here. But definitely a huge influx with visitations, particularly for our bike hire, which is a large part of our business, that is primarily aimed at tourists – you don’t get a lot of the locals hiring bikes. In the hire it’s 95% tourists.
We mostly hire mountain bikes and rail trail bikes. We don’t have any road bikes for hire.
In the rail trail, we’ve got cruisers and e-bikes. In mountain bikes we’ve got e-mountain bikes, dual suspension and hard tail mountain bikes. The biggest volume would be the rail trail market but mountain biking is a popular past time up here as well.
At Mount Buller we’ve moved to a new premises in a new, more modern space that we’re sharing with another operator who will be working there this summer. ‘Via Ferrata’ which is a rock climbing experience operating on the summit of Mt Buller. It’s a type of rock climbing where you’re connected to a cable that’s connected to the mountain, so you’re not connecting and disconnecting from ropes.
It’s Spanish or Italian and it means ‘via steel’. It’s a really cool experience up on the summit and you get some amazing views.
We’re right next the Kooroora Pub and the pump track, so it’s a central location.
What will Christmas and summer be like?
We’re expecting a pretty strong summer. Our Mansfield store definitely gets a peak in the lead up to Christmas. Not so much our Bright or Mt Buller stores, but from 27th December it’s game on for all the stores.
Particularly in Bright, there’s some new development in the mountain bike park, new trails. We’re expecting lots of visitors to come up to that. And Mt Buller trails have had a bit of a refurbishment this past few months, so they’ll be running in great condition, come after Christmas. So we’re expecting a pretty bumper summer.
The team, I was counting them the other day to try and make a booking for a Christmas party… we’re looking at about 30 people, spread across the three stores. Bright is about 12, Mansfield and Mt Buller sort of share staff a bit.
Hire bikes, if we included the fleet of bikes we have for school tours and groups it would be over 200 bikes all up, somewhere around that. Quite a few bikes, that’s for sure.
We’ve seen a lot of growth in this area over the past few years. Particularly over the covid boom, but we’re pretty fortunate in the area we’re in. Tourism is strong and doesn’t tend to get affected as much by those economic factors that some of the other stores around the country are facing.