How’s Business? – July 2022

By Phil Latz | 7th July 2022 |

Pitcrew Bikes shop front — Pitcrew Bikes North Shore, Auckland, NZ

Welcome to our monthly check-in with bicycle retailers across Australia and NZ.
As always, in addition to asking “How’s business?” we asked a follow up question. This month’s question was, “How is your winter season shaping up compared to pre-covid winters?”

Mark Wade from Pitcrew Bikes, who has two stores, to the north and south of Auckland, NZ said:

Business is up and down. I guess like everyone it has slowed a little bit. Entry-level product has definitely slowed down pretty substantially. We’re predominantly a mountain bike, off-road shop.

Having said that, we do quite a bit of entry to mid-level e-bikes – $4,000 to $8,000 stuff is going pretty darn well.

A large percentage of our customer base is baby boomers. They ride all over the country on e-bikes at the moment, which is all good for us.

We’ve only been going five years. Our company has grown from one little business that I bought for NZ$25,000 (A$22,750) five years ago to two stores and now one of the largest independent retailers in Auckland.

I’m not from the bike industry. I’m a business owner. I love bikes, but when I first came into the bike industry I saw how poor a lot of the customer service was from the big guys. I saw how poor online representation of product was, so I thought “I know what we need to do”.

During the COVID lockdown when people were panicking and cancelling orders, I was ringing up suppliers and saying “I’ll take everything you’ve got coming for the next two years”.

We’re not that big a store really but it was just seeing opportunity. I’ve constantly pushed for growth. My job within the company is to bring as much business in the door as I possibly can, not necessarily work in the shop dealing with the customers – although I do like to do that when I can. But I work on the business rather than in it.

How is your winter season shaping up, compared to pre-COVID years?

This winter is not too bad, I suppose. Winter is a relative term. New Zealand runs on sunshine. If the sun is out, customers are in the store, regardless of what time of year it is and unlike you poor buggers, we haven’t had a huge amount of rain this year.

But my feeling is that with interest rate hikes, inflation and those sorts of things, your mum and dad market has been reasonably quiet. The people that aren’t worrying about mortgages, your baby boomers, it doesn’t seem to affect them now that they can be mobile again after having a long period of lockdowns.

The (IBD) market has been struggling. Where you guys have got 99 Bikes, in New Zealand we have Evo and Torpedo 7 which on scale are bigger than 99 Bikes, relative to our market.

Now with 99 Bikes coming into the market after buying Bike Barn, there’s going to be price wars in our market. The independent market in Auckland isn’t that strong. It’s where the big boys have been rolling out at scale.

Sam Chant from Drift Bikes in the Newcastle suburb of Kotara, NSW said:

Business is going well. We have definitely seen an update with bicycle sales with the pandemic. It has been quite a challenge with both higher demand and supply chain shortages, but we’ve managed to make changes and get through.

In the last two to three months, like most shops, at least in the east coast of Australia, we have seen a decline in bicycle sales. But with the amount of bikes locally that are now out and about, we’ve had a massive uptake in servicing and also apparel and accessories to go along with it. So, we’ve had to make changes. We’ve hired a few more mechanics to keep up.

The next challenge is not so much sales, it’s keeping our local riders up and running. We’re very full with bikes and gear at the moment.

Spare parts, chains, cassettes, that sort of stuff can still be tricky.

We picked up Trek at the start of 2020, so just over two years now, right before COVID. We’re very lucky to have two big brands in our shop (Specialized and Trek).

We’re across the road from the local Westfield shopping centre. We’re fortunate too because we have one of the local cycleways, the Fernleigh Track (one of Australia’s best and most popular rail trails) just five minutes away from our front door. A further pedal from that we’ve got the Glenrock Mountain Bike Park. It can all be accessed from our front door.

How is your winter season shaping up, compared to pre-COVID years?

It’s been a tricky one, because we’re coming off the back of three months of constant rain. In terms of business, we are still up from pre-COVID, but in comparison to last year and 2020 we are down a little bit in foot traffic, just because of the local rain.

We’re predominantly a mountain bike store and somewhat gravel as well, so our riders rely on good conditions. But on the flipside, with people not riding a lot of people have discovered the joy that can be had working on your own bike, so we’ve been going through a lot of spare parts, suspension seal kits, tubeless tyres, that sort of thing.

We’re still up, but it’s the shift in demand that we’re trying to keep up with.

Anthony Martins from Bikes on High in Rockhampton, Queensland located 615 km north of Brisbane said:

Business is not too bad. Things have slowed down because of the elections. Whenever there’s an election, things slow down. Just before tax time, things slow down. But they have started picking up in the past day or so. There’s a shedload of people coming in looking. They’re expecting a bit of cash coming through I’d say, whether the government kickbacks have helped that or not, we don’t know, but there’s a lot of people looking.

Repairs are still through the wazoo. Still a three-day wait on most repairs and having difficulty getting time to do basic repairs on the spot.

Stock availability is still hard to get. Unless you’ve pre-ordered it months ago, you’re not going to see a lot of it. Those who have a bit of cash can have a bit of stock on hand, like us. Especially basic things like tyres are getting hard to get a hold of. A lot of companies are not holding as much, not like they used to anyway.

We’ve got a lot of grandparents coming in looking at upgrading their grandkids’ pushies; your 12, 16, 20 inch kids’ bikes, that sort of thing.

Mountain biking has started kicking off a bit more. Those that had bikes are starting to look at upgrades.

The road scene has picked up. That’s a good thing. There’s been a few more basic road bikes moving out the door in the past two months. That slowed down during COVID but now there’s a few more looking at getting into the road scene – especially with fuel prices.

Anywhere up to that $1,700 mark seems to be not too bad – we’re talking drop bar bikes. Your higher end stuff is still hard to get. That Ultegra sort of level, is still hard to get. We ordered bikes for people eight months ago that are only just starting to show up.

There’s been a big push in the local area for scooters. With fuel prices the way they are, a lot of people are thinking, “we’ll lose that second vehicle and start using e-scooters or bikes”. Your normal e-bike in your comfort stuff has started moving a bit more as well. It’s fuel costs. They’ll commute buy bike rather than use the second car. And with the (high) price they can get for second hand cars, they’re dumping cars.

We are selling e-scooters but they’re becoming a hassle. It’s a hard market. There’s not a lot of margin in it but there’s a lot of problems. Consumers don’t look after them. They’re buying them online, who can sell them a lot cheaper than us for the same product, then they’re coming to us to repair them.

But we don’t make a lot of money out of them and they’re bucking and screaming about what it costs us to repair them.

Once you start selling e-scooters, you get every man and his dog with every different type of e-scooter, whether they’ve got parts or not, wanting you to fix them.

It’s one of those markets that I think will stay mainly online and I don’t think there will be many repair agents for them.

Harvey Norman, everyone else, sells them and they’re somehow able to sell them significantly cheaper than we can.

With some of these mail order scooter importers, it’s almost like dealing with Telstra, when you can tell them what you want, but they still don’t understand what you’re chasing.

How is your winter season shaping up, compared to pre-COVID years?

It’s bloody cold! Up here in central Queensland, normally we don’t get this cold.

We’re selling a lot of lights and a lot of people are chasing woollies. Most of the time we don’t drop below double digit temperatures but the past couple of weeks we have been.

At the moment it’s bucketing down rain and it has been for the past three days. There’s not many people out cycling because it’s crazy cold. Most people out here don’t ride when it’s below double digits.

We don’t stock a lot of winter-based clothing but we’ve moved a bit this time.

Darren McNeill from Treadlies Bike Shop, in Kingston, just south of Hobart, Tasmania and the southernmost bike shop in Australia said:

It has quietened off a bit with the colder weather and snow here in Tassie. That’s to be expected for a little bit. It doesn’t take long before it starts picking up again. We can’t see snow from our shop window but if we step out the door we can.

Pivot is a new brand for us. It’s something I’d always wanted to do but it took me a while before I took the plunge of getting a full range of them. A big commitment, the expense and I wasn’t really sure how it would go. There are a lot of stores around Hobart that do high-end mountain bike very well and I wasn’t sure if we’d be able to compete with them.

But you never know until you try it. It seems to be going well. Momentum is building with it.

Electric bikes are always really popular, a bit like other stores I’d imagine. When you can get them, you can sell them. The most popular ones for us tend to be e-mountain bikes. They’re the most versatile for people to get out and explore, only having the one bike.

How is your winter season shaping up, compared to pre-covid years?

I haven’t studied the numbers but it feels a bit better than pre-covid winters. I think there’s still a bit of buzz around about riding bikes and getting out with the family. That seems to be carrying on a bit into winter.

But it’s not as busy obviously as it was during those full COVID years, but still pretty good.

Owen Marshall from St Cloud in Fitzroy, just north of the Melbourne CBD said:

Business is good, it’s steady. We’re not booked out weeks ahead as we have been over the past couple of months but there’s still work here every day. The workshop is vital to our business. We’ve got quite a few bikes on the floor but the workshop is the bread and butter of it.

We’re on Brunswick Street. We used to be on Gertrude St (several years ago) around the corner, but this store is probably four or five times as big.

We predominantly do a lot of road bikes. That’s been our stock standard since we’ve moved location particularly. And gravel bikes. A lot of our existing customers that have a road bike are transitioning onto gravel bikes.

Our biggest brand is Giant, then All City, Curve, then we do a few De Rosa and Opens.

How is your winter season shaping up, compared to pre- COVID years?

It seems to be pretty similar to that traditional dip in business. That probably went just a little bit longer. I think people are more used to being house bound this time than they are normally.

A lot of people bought indoor trainers. As somebody said, bike trainers were the toilet paper of the bicycle industry. A massive amount of them got sold. That’s made the transition to keep going (indoors) a lot easier for most people.

Jack Baker from Elite Racing Cycles in North Perth, WA said:

Business is pretty good. We’ve just recently moved stores. We’re still adjusting to a new demographic.

We’ve moved about 1.5 kilometres, so we’re just a little bit out of the city now in the suburb of North Perth. The move was to up-size to a newer, fresher store. The city is starting to die down a bit, so being in a suburb, that is still close to the city, we thought would be more beneficial.

Road bikes are still at a premium for us. As long as the stock is coming in, we’re able to sell them pretty regularly. We do three core brands, Cervélo, Focus and Bianchi. Cervélo and Focus are the ones selling better at the moment, due to supply but we’re still selling some Bianchi – more of their high-end bikes.

The new store is a big venture for us, so we’re just trying to get our feet grounded and established in North Perth. It’s really not that big a move as far as distance goes, but it has a different feel to the store, and a few new staff, so it has a fresh feel to it.

We have high ceilings, a big open space, lots of natural light, a nice mezzanine, so it’s a cool new spot.