How’s Business? November 2021

Welcome to our monthly chat with retailers across Australia and New Zealand.

We all know that bike supply is tight, particularly for higher-end bikes, say anything over $2,000. But just like covid, you can get sick of hearing the same news.

And of course, supply is only one of the two key factors that will determine how long the bike shortage continues. The other is consumer demand.

So this month we’re pivoting to look more closely at demand through our follow up question which was, ‘What levels of demand are you seeing and have you noticed any changes in consumer demand trends compared to pre-covid seasons?’

To some degree, dealers said they were not able to gauge true demand because of the ‘shop around syndrome’ that’s prevalent right now with consumers calling further afield to find bikes wherever they can.

Richard Allin of Pushbikes in Christchurch the largest city of the South Island of New Zealand said:

Business is great. It is for every bike shop since the covid times. Sales are still strong. Enquiries are great. We’re just all obviously still suffering from the supply chain issues.

We have three stores. One of them is just about to open tomorrow in St Martins, which is technically still in Christchurch. One in Christchurch and one in North Canterbury.

We sell all types of bikes. Primarily we’ve been a mountain bike store over the years. We don’t engage massively in road bikes. But certainly over the past two years and since covid the e-bike trend has really kicked off and that would definitely be our greatest category in store.

Our main brands are Giant, Liv, Norco, Sinch, which is a new NZ e-bike brand and some other more minor brands. Sinch has gone very well for us, but they’ve got some very big challenges being last on the list with the factories.

Within e-bikes, our biggest one that people are after is a step through mountain bike for the older generation, then an entry level mountain bike around NZ$4,000 price point, then the third would be an entry level full suspension that sits around that NZ$6,000 price.

Parts and accessories have been all over the place. We’ve had a little bit of disruption but overall, we’ve got through that pretty well. But the bike thing is the big thing, and it’s going to stay that way all of this season.

Demand trends?

Before covid vs now, demand has gone through the roof on that entry level, step through e-bike. Because people can’t travel, they want to get out and enjoy their own back-yard, beautiful New Zealand has a lot to offer. We’ve got many dedicated cycle tracks, off road, on road etc. People want to get out and enjoy them and of course, they need a bike to do that.

It’s a double edged sword. Every day we’re getting enquiries. But many of those enquiries are probably coming because people are ringing around many different shops to try and find stock. Had they already found it at another shop, we probably wouldn’t have got that enquiry.

But for us, demand seems to be on the increase all the time. We’ve got waiting lists for bikes… one of our most popular bikes, the Sinch step through mountain bike, they’re delivering to us March next year. It’s a lot of months between now and March for people to get hold of one. But they’re still prepared to go on the waiting list. Definitely consumers have now accepted that they have to wait. They are prepared to pay upfront. It’s just part and parcel of it now, not only in the bike industry. Consumers are now accepting it.

Martin Spong from The Bike Shop, Moonah, in the inner northern suburbs of Hobart, Tasmania said:

Honestly, business is pretty slow at the moment. Our workshop’s pretty good, but I can’t get bikes to sell. Because our suppliers don’t have the bikes at the moment, we can’t get them to sell them. It’s just our workshop that’s keeping us going. I dare say that I’m not the only one!

We mostly sell BMC and Focus – we do high end road and mountain. Normally I try to carry 50 bikes on the floor but I’m probably lucky to have 20 at the moment and that includes kids bikes. There’s no high end road on the floor at the moment, no high end mountain. There’s nothing about.

They’re telling me mid next year. So at the moment we’re relying on our entry level stuff – we’ve got Apollo. We’re just hoping the kids stuff gets us through Christmas. Apollo is pretty good. We’ve got the kids bikes on the way ready for Christmas, but that’s pretty much it. I don’t think I’m the only bike shop in this situation at the moment from what I hear. I speak to a few other shops and they’re telling me the same thing. Anything high end, they just won’t have.

Luckily this is just a husband and wife business so we’ll just continue on as we are. The workshop’s what keeps us going at the moment.

We’re in lock down at the moment too. We’re supposed to come out of it tonight, but we’ll see what happens. At the beginning of all this it was good for the cycling industry. But manufacturers just can’t keep up. It’s going to be a low Christmas for quite a few as far as trade is concerned.

The majority of our suppliers are saying June 2022, maybe August for anything e-mountain bike. It’s just the way it is. You’ve just got to deal with it somehow.

I guess in the end it’s up to us to make it work. Just don’t spend unless you really need to. There’s no way in the world we’re going to get any decent bikes for Christmas. I’ve tried and tried. There’s just nothing.

Demand trends?

The main thing I’ve noticed is that people seem to be willing to spend more money on better quality bikes. They’re going away from places like K-Mart. But I think that’s basically because K-Mart can’t get bikes either!

David Roberts of Valley Cycles in Fortitude Valley, inner city Brisbane, Qld said:

Business is good. It’s just the supply of bikes – the same as everywhere. During covid, everyone’s riding a bike. No-one’s going away, so everyone wants to buy a bike.

We now do a lot of brands, like BMC, Merida, Norco, Willier, Felt… we can’t do Giant, Trek or Specialized obviously (due to other dealers or concept stores nearby). We do high end road bikes, mountain bikes both electric and normal, commuter bikes, your entry level road bikes and kids bikes.

I’ve got bikes on order and coming. Hopefully we should have them next month. Generally we have about 80 to 85 bikes on the floor. At the moment I’ve got 33 or 34 bikes. It’s the Shimano and SRAM componentry that’s slowing everyone up. Like every other shop we’ve all got bikes coming in and back orders from customers.

We’re doing our best! Someone comes in and wants something and we’re trying to find it for them.

Demand trends?

Demand is very high. Everyone wants to ride a bike because it’s one of those exercises you can (still) do. It’s your commuters, it’s guys that are upgrading their road bikes because they’re not going away on holidays so they’ve got extra cash. And a lot of e-bikes, electric mountain bikes and electric road bikes. It’s putting people on bikes who wouldn’t normally ride bikes. It’s seamless now and more enjoyable.

There really is a bike for everyone – it’s just finding it.

Ash Swann from Yarra Valley Cycles with stores in Lilydale and Warburton just east of Melbourne, Victoria said:

Business is good. It’s definitely posing its challenges. In particular our core business being dual suspension and dual suspension electric mountain bikes. They’re very much in short supply at the moment and therefore we’re finding ourselves scurrying around trying to compile lists of available bikes that are due at some stage and pre-selling a lot of that before it even arrives.

At any point of time, we could have 150 to 200 pre-sold bikes, before they even get here. The priority for us is to make sure that in order to keep in control of that we keep up to date with the lists, make sure the lists are accurate, the dates remain accurate and the communication to the customers is extremely accurate – as much as you possibly can with that many pre-sold purchases.

On the whole, we’re selling through a hell of a lot of product, probably more than last year, which was not predicted this year.

Our Ride Time Bike Hire has a fairly healthy amount of people coming through, but it has been difficult. Covid affected due to lockdowns and travel restrictions, it’s also put some delays into our local mountain bike parks – covid has affected that as well.

Our Warburton store is now open. We do bike hire and sell a few accessories but we don’t sell bikes out of there. We just do a bit of service. It’s been workable, but I reckon that hire business will pick up soon.

Demand trends?

The biggest change has been around youth. Probably because of the increase in the amount of use by the youth over the lockdown period, we ended up with a hell of a lot of extra bikes going out. There’s been a requirement for better bikes. Kids bikes which are higher model dual suspension mountain bikes. Even parents buying electric bikes for their kids. That’s number one.

Number two is it’s bringing about a mental health aspect for a lot of parents. They’re actively trying to get their kids onto bikes so that they’re out their on the mountain. We’re finding young kids in particular – they’re trying to find bikes that can hold up to the punishment and demands of mountain biking. At the moment I feel like we live in a town which is a mountain bike town and that everyone is riding a mountain bike which has to be of fairly good quality.

Craig Yates of Giant Adelaide in the CBD of Adelaide, SA said:

Business is still tracking along pretty well at the moment. We’re finally getting some decent weather down here. I guess we’re one of the lucky states where the lockdown hasn’t effected us as much.

Everyone is outdoors and still exercising and racing and competing. We’re seeing that reflect on some of our sales.

We’re a Giant shop. We opened this up with Giant Australia back in 2011. The business was sold to Shane Wolki and the guys at Pushys coming up on three years ago now. We solely sell Giant Bicycles.

Giant are still flowing through some 2021 models and we’re seeing some cross over into 2022, so we’re still getting some supply of both of them at the moment.

Road is not so bad. Mountain bike is the hard one to find that three or four thousand dollar price point, for sure. We’ve got a waiting list here, which we started when the whole covid thing hit. We take as many details as possible from consumers and try to keep them updated with ETA’s. We weren’t really taking deposits because it was almost causing frustration because the consumer was expecting it on that date. The way ETA’s are at the moment, they can blow out, so we held back on that and we’re just trying to keep consumers on that waiting list updated.

As soon as we get allocated stock from Giant on a fortnightly or monthly basis we’ll go through that list. We’ll ring the consumer and they may tell us they’ve already got a bike, thanks for calling. But it’s just working our way through the hundreds of people we’ve got on this waiting list.

(Re the Tour Down Under being cancelled for the second year in a row…) We’re disappointed. We love the event. It brings so many people here from interstate and overseas who we catch up with every year. It will be great when it all opens up again and we get back next year, hopefully. We’ll get to see some familiar faces again.

But it’s still a good thing that AusCycling is putting on instead with the national racing.

Demand trends?

Electric bikes is what everyone’s chasing, for sure. That’s the biggest growth for us at the moment and it seems like it’s going to keep going.

Consumer demand – we’re still seeing that three to four thousand dollar price point on mountain bike and road is what people are chasing.

I haven’t seen demand change a huge amount since pre-covid. It’s just those new segments. The electric bike has made a huge difference to sales.

Demand for bikes is still pretty strong, that’s for sure.

Alister Scotford of Ventoux Cycles in Coffs Harbour on the north coast of NSW said:

It’s hectic. We’re very busy. Workshop’s booked out for close to two weeks ahead at the moment and the showroom’s been flat out with sales.

I think it’s very similar to when lockdown happened last year. Everybody got on the bikes and it’s like a second wave.

There’s not a chance that I’ve got enough bikes for Christmas. I’ve got a lot of stock but it’s very focused. There’s not much range here. It’s very focused on your $600 mountain bike. The supply of kids bikes is looking like it’s going to be ok for Christmas, but we have some big gaps starting to appear. I think come December, we’ll have not much left at all.
People are shopping early for Christmas because there’s a lot of stock outages with other stuff (non-bike industry). There’s a lot of laybys going on this year. We’re selling bikes now when normally they might wait until November or early December. But people aren’t waiting at the moment because they know what the situation is.

Demand trends?

The demand is quite high and I don’t know if we’re seeing a lot of demand because the other shops in town have had no stock and I’ve had stock, so we’re seeing everybody.

My competitors in town, one’s a Trek store and the other is a Specialized store. They’ve had terrible stock issues. We would normally be carrying a lot of Giant, but we’re not getting much out of Giant, but we’ve had some really good support from Advance Traders with Norco. We’ve cast the net wider to get other brands that we normally wouldn’t sell.

I just went hard and got a heap of stock. With the situation where people are ringing from Port Macquarie (the closest regional city, 152 kilometres away), from quite far afield to try to find bikes. It seems like there’s a lot of demand but we’re just seeing people from a lot of areas who can’t get stock, ringing around and chasing bikes.

Up until everybody couldn’t travel we were selling bikes into other areas.

We’ve got a lot of kids getting into more advanced mountain biking, so a lot of kids are chasing dual suspension mountain bikes. A lot of families are discovering the sport together. That’s been a big driver for us.

Trail building has gone through the roof in this area. There’s a couple of new areas that have opened up and flow trails being built which is really driving the mountain biking side of things.

E-bikes of course have gone mental, but my stock availability is not as deep as I could have gone – or should have gone. It was a massive investment and I thought I would just try to keep the bread and butter going, but the e-bikes, I could have sold 50 times more than what I did.

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