How’s Business? – February 2024

Welcome to our monthly conversation with bicycle dealers. As always, we phoned dealers from across Australia and one from New Zealand and simply asked, “How’s business?”

For this month’s follow up question we asked, “How were your Christmas sales compared to previous years, particularly for kids’ bikes?”

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Phil Lockwood from Cycle2 in Launceston, Tasmania said:

As everyone would probably understand, we’ve had ups and downs in the current climate. We’re still going alright, but there’s highs and lows with stock availability and overstock is still an issue with some suppliers.

It’s definitely moving again. I think we’ve hit a bit of a turning point with consumer confidence. It was probably around November when the inflation was broadcast that it actually dropped.

The other day in the news they were saying how inflation’s dropped faster than they were predicting. It does seem to reflect on people’s purchasing, obviously because of interest rates.

We’re probably 80% or 90% Trek depending upon stock availability. Then we do GT. We also from time to time have Vivente touring bikes.

How were Christmas sales including kids’ bikes?

I would say, without bringing up the numbers, they were as good or possibly a bit stronger this year. They would have definitely been stronger, but we ran out of a few sizes.

I’m not sure what it’s like Australia-wide, but down here with all of the trails, you’re seeing a lot more families get on bikes. The trail networks are getting better so people are getting out.

We’ve got Derby and now Georgetown which is only 40 minutes away, then Railton. We’re spoilt for choice. Then Trevallyn which is only a five or 10 minute drive or 20 minute ride out of Launceston. There’s a fair bit of climbing to get up to the trail network.

Dax Neech from Topline Cycles in Nerang, just inland from the Gold Coast in south-east Queensland said:

Business is ok overall. I work exclusively in the high end road space. Our online business is probably contributing 50% of our turnover, which is fantastic.

The main issue we have is availability of product – complete bikes, framesets, complete group sets – we’re still experiencing delays and lack of product. It’s making it difficult to sell bikes because there’s this massive wait.

I think what’s happening is people are saying, “Well I can’t get a new bike and there’s plenty of good second hand bikes.” These are bikes that people bought during covid and then decided that it’s not their thing so they’re offloading them. So there’s a glut of high end second hand bikes available.

I think we’re still about six months away from having that correction, so that’s two years post-covid to make that happen. The industry went a bit crazy during covid and kept purchasing family bikes and that mid to low end product. But post covid there was a massive exodus of people saying, “We’ve been three years without an overseas holiday, let’s go!”

People started spending their money on something else and all the bike suppliers were stuck holding millions and millions of dollars’ worth of product.

This issue for us is that people look at the bike industry and say, “Oh, everything’s on sale! There’s too many bikes. I’ll be able to get a high end road bike cheap.”

Then they go hunting for high end road bikes and find there’s no stock available, but there’s still a requirement on our part to come to the party and discount to keep these people waiting.

“I can’t get you a bike for three or four months, but I can take 5% off if you’re prepared to wait.” There’s negotiation at that level to keep the customer interested in the sale.

We’re short on all our brands. Orbea’s not too bad. Pinarello – there’s a new model coming so the market knows and the supplier doesn’t want to bring in product that’s going to become obsolete in six months’ time.

BMC there’s massive stock issues. Colnago’s have been coming through, but fairly slow. Their new All Road version that was launched back in June / July, we’re only just starting to receive that, so there’s six or seven months’ wait on those.

Cannondale’s had stock issues for years now – getting hold of those has been tricky.

We’re trying to move back towards that ‘just in time’ supply chain, but it’s still probably six months away from happening.

How were Christmas sales including kids’ bikes?

We don’t sell kid’s road bikes. We’re not a Christmas shop, but we were about 50% up on last year. That was due to the launch of our online business. We launched in November 2022 as a beta (test site) but I didn’t do anything with it until 2023 and did the full launch in November 2023 and it’s skyrocketed our sales – selling P&A for the most part.

Nathan Whitten of Giant Echuca on the Murray River in northern Victoria said:

We’re a unique shop where we’re also the Yamaha motorcycles dealer. We purchased the push bike shop and moved it into our premises and Nick manages it from here.

The push bike store is going well. E-bikes is what’s keeping us busy.

We’re a very holiday orientated area. The last month has been busy with tourists – lots of foot traffic but not lots of great sales.

But as a whole, business is good. It’s everything from mountain bike, road, city bikes, e-bikes… it’s not a lot of one thing but a little bit of everything.

E-bike sales have been strong for the past 12 months – that’s what’s been keeping us busy. We’ve had a few e-bike hiccups in terms of warranty work, but as a whole it’s been very minimal.

We hear that it’s a bit doom and gloom in the pushbike industry but it doesn’t seem too bad.

It was a steep learning curve for us because we bought the business during the covid peak two and a bit years ago. Then we were overstocked when all these discounts started.

How were Christmas sales including kids’ bikes?

It was down considerably, but we’re only going of one or two years prior that were strong during covid.

James Niven from Pushbikes in Christchurch the largest city in the South Island of New Zealand said:

We’re doing pretty well at the moment, since Black Friday (24th November 2023) it’s turned the corner and cranked up a bit, which is fantastic for a smallish local business.

We’re primarily Giant but we dabble in a New Zealand brand called Sinch with makes rail trail orientated bikes. We haven’t touched their new high-end stuff yet. We also sell Rocky Mountain and a few other brands.

Now we’re primarily a dual suspension e-bike store. Gravel’s probably the biggest growth at the moment. We’ve sold a lot of gravel bikes over the past month or two. Probably our highest unit number would be gravel bikes right now, over e-bikes and normal bikes.

How were Christmas sales including kids’ bikes?

Kid’s bikes stalled for a year or two. But over Christmas we definitely sold more kids bikes than we had in previous years. I think kids bikes kind of go in a cycle, like wind trainers – every three years we seem to get a rush, then you don’t sell any for a while.

Jeffrey Stoll, from Toms Cycle City in the inland Riverina town of Griffith, NSW said:

The run up to Christmas for us was fairly steady. Then about three weeks out from Christmas it sort of went crazy – certainly the last two weeks before Christmas for us was very strong.

Things were selling through prior to that. Laybys were about on par with other years. I wouldn’t say we had any more or any less. It just seems that everyone was leaving their purchasing closer to that Christmas period – maybe things for a lot of people were a little tight – waiting to see what funds were available to spend, so they left it to the last minute.

We started selling bikes in 1963, so we’ve been in the town for a lot of years. We moved back to our original position in the main street. We relocated for 40 years away from the main street, but our premises in the main street became available so decided to utilise the space ourselves, which has been a very positive move.

Tom, who started the business, was my father in law. I’ve been in the business myself now for 30 years.

How were Christmas sales including kids’ bikes?

Just knowing what I forward ordered and what I had to top up, it was an average year for kids’ bikes. But the entry level adult mountain bikes, ladies’ bikes and junior bikes stepping up into adult sizes, were very strong.

Lia Weston from Bio-Mechanics Cycles and Repairs located in the city centre of Adelaide, SA said:

It’s really busy. We’re lucky in the sense that we don’t seem to get the seasonal shifts that a lot of other workshops and shops get. We’re busy all year round. We’re usually booked out two to three weeks ahead on average. Sometimes that blows out a little bit. That’s been consistent for many years now.

The Tour Down Under of course is always a busy time as well. Lots of interstate visitors, people getting off the plane and finding that something’s broken on their bike and turning up on our doorstep – that always keeps things interesting! (laughs) But the atmosphere is wonderful. There’s a lot to see.

We still continue to get a good spread of people. We have everything from basic commuters to mountain bikes that are a few years old that people want to keep running for sentimental reasons through to super high-end stuff. Lot’s of gravel bikes, that’s for sure.

One of the reasons we might be buffered from huge changes is the fact that we are probably the only shop in Adelaide that doesn’t do any e-bike work.

We’ve started our 20th year. When we started we made a conscious decision to be 90% workshop and 10% retail and that has stayed unchanged the whole time.

We’re really picky about who we take on. As an independent we’re not tied to a major brand so we can pick and choose who we like to work with and also bikes that we love ourselves.

We do Bossi which is a Sydney titanium brand. Genesis, which are from the UK and primarily steel adventure bikes. Breezer – they’re our major brands that we keep in stock. We also get in Vivente bikes, Soma and Surly – we’ve been a Surly dealer for years. We also do Ibis and a small number of Fuji’s.

Availability is often a bit of a challenge with the boutique brands.

We’ve never done kids bikes. Having a major chain store bike shop just down the road, if people are looking for things we don’t do, like e-bikes and kids bikes, we can direct them down to those guys.

At the moment we just have my husband Pete who is always our primary mechanic and we have one other mechanic who’s been with us for six months. That is always an ongoing challenge for us, finding mechanics with the skills and experience we need, because we do so much work that other shops don’t do or can’t do.

We had a lovely guy called Shane who was with us for 18 months who was excellent, but then his wife got a job in New York so he had to move, because we couldn’t make him choose us over his marriage… the marriage usually wins over work!

How were Christmas sales including kids’ bikes?

Our sales were the same. Kids’ bikes aren’t a thing for us and we don’t do clothing or anything like that so Christmas sales don’t really apply to us.