How’s Business – July 2021

By Phil Latz | 24th June 2021 |

Welcome to our monthly chat with half a dozen retailers spread throughout Australia and New Zealand.

With winter now well and truly set in and the traditional quiet season for bike shops underway, for this month’s follow up questions we asked our retailers if they were using this time to make any shop fit-out upgrades or other changes to their business.

Andrea Herklots of Blind Freddy Electric Bikes in Wilston, in the northern suburbs of Brisbane, Qld said:

I think it would be fair to say that we’ve seen a distinct uplift in business over the past couple of months. Both for the recreation, commuter riding sector but also improved awareness across the customer base of people living with mobility issues or disabilities.

It’s a very interesting time to be offering the range of customisation and mods that we do to meet the needs of a whole range of riders.

If we include modifications to standard bikes for people who have lost balance, trikes and things like that I would say our sales split is 60% modified, 40% standard bikes, so it’s a substantial part of our business. We don’t believe in bikes being one size fits all. We may have somebody come in who is a bit nervous or they may want to change things around to fit their body shape.

We take the time to go through the type of riding they want to do, what their aspirational goals are for riding and offer them some alternatives to what you can buy straight off the shop floor.

If you’re talking around special needs trikes, then the percentage is lower because people who ride bikes that need modifications are not necessarily people who live with special needs, in the more formal definition. They just may be aging seniors, maybe people who have lost confidence… We build our business around offering that one-on-one support to our customer base so that they don’t feel intimidated or threatened or embarrassed to discuss their concerns with us in the sales process or in the post-sales process.

I don’t think there’s anyone else doing what we do anywhere. The feedback that we get from our customer base, which is from across the whole of Australia, is that there’s not anybody else doing what we do.

Blind Freddy Electric Bikes has been going for about 15 years. We only purchased the business two years ago.

Richard’s an engineer by degree with 30 years’ experience. I had a completely different career for 30 years. Richard’s an avid rider. I’m a ‘mumsy’ rider.

We’re interested in electric bikes because of sustainable transport.

Any shop fit-outs or changes this winter?

No, because we’ve just done a massive shop fitout to move into the location that we’re in, which is on the busiest northern bikeway into the city.

We completely changed the fitout to add a disability access ramp into the showroom, a vertical platform to get between the two floors for people who aren’t able to go up the stairs and a ramp directly into the workshop, which is very handy when you’re doing servicing on cargo bikes and trikes.

Kevin Excell from Brooks Cycle Depot in Murray Bridge, SA a regional town about 75 kilometres east of Adelaide said:

It’s been good. It’s slowed down a little bit in the past week or two, but from April 2020 to April 2021 it was crazy busy.

We mainly sell mountain bikes and hybrids. We do a little bit of BMX and some electric commuters, tricycles, that sort of thing.

It’s a lower socio-economic area here in Murray Bridge, but it’s pretty good. We’ve been here 93 years now. We’ve been in the same family the whole time. My uncle started it in 1928 and my dad took it over in 1953. He was here for 50 years. I’ve been here for 39 years.

But this is the end of the line. I’ve got a nephew – but he’s not really interested, but that’s ok.

The plan for retirement is ‘rubbery’!

Any shop fit-outs or changes this winter?

No. I don’t think we’ve changed the shop in 30 years, so there’s no point in changing it now! (laughs) People like it too. Some people walk in and say, ‘It’s just nice that it’s still the same.’ Because we don’t always get return customers in the next day or two, sometimes it’s 15 years apart! You get quite a gap sometimes. They might have bought a bike for themselves and now they’re buying a bike for their kids, or something like that.

Geoff Appleton from Giant Perth in Hay Street, the main shopping street in the centre of the CBD said:

It’s been interesting. At the beginning of the covid stuff in April last year it was like a ghost town in Hay Street here. Most of my staff left. We weren’t sure what was going on at that point because it was dead. Everybody eventually came back to find us once all of the shops in the suburbs had sold out of their bikes. So we picked up again in May.

It was interesting in the city in those early stages. I had to open only for a couple of hours during the day. You’d have a lot of unsavoury sort of characters coming into the shop because there was just no witnesses around. You felt a bit unsafe actually. Because we were one of only a few stores open in the city. So we were being a bit cautious at that time.

But it pretty quickly turned around when everyone started realising that bikes were the thing. Then it was just about trying to get stock, as everyone would have gone through in this whole last year. Fortunately, with my relationship with Giant, we did ok for that six months leading into Christmas.

Then this calendar has been interesting. We thought we were heading for the biggest year on record, but this year has been a little trickier to get stock. Then of course we had a couple of small lock downs over here. Nothing like you guys had over east, but February, my sales were extremely low. Probably my lowest all time. And then the April little lockdown – it affects you for a few weeks after. All the companies here in the city still have people stay home. It takes a while to get the numbers back.

The city is still definitely not as busy as it was and I don’t think it ever will be. That’s a discussion that I’m having with my landlord on the value of CBD rent moving forward.

I don’t plan any moves. It would only be if there were major issues going on with covid that forced people to stay away from the city completely.

But everyone gravitates back, they’re just not doing it in the same numbers because more people are able, and have gotten used to zoom meetings and working from home. The big mining company offices here have still maybe only got half of their staff back. It’s just not the same as it used to be. The lunch rushes are certainly nowhere near what they used to be – having people deep in front of the counter. Now we only need a couple of people to handle that lunch rush. It’s not like it used to be years ago.

Overall the margins are up, so the sales, even if they are lower, we’re still making more than we used to. Which is great, and much needed in our industry.

My confidence of being here long term is through the roof. I’m very happy with the way it’s going. Obviously with my biggest competitor changing… (referring to Trek buying The Bicycle Entrepreneur chain which was previously also a major Giant dealer) …has made me even more confident about my position in the city.

It was unexpected. A big move, but ultimately I’m quite confident that we can do well. For my business it’s a great thing. Overall for Giant, they’ll need to start building their Giant network up, so we’ll see more Giant stores, moving into the future.

Any shop fit-outs or changes this winter?

The only update we’ll make over the coming months are to our logos and graphics. No major refit planned for the remainder of this year.

For us, the shop still looks fairly current. We just need to change our logos to the new Giant logo. It’s just a bit more slanted, faster looking.

Andrew Hickey from Bike Lab in Hamilton, which is New Zealand’s fourth largest city located about two hours south of Auckland said:

Business is good. There’s lots of new people coming to the store which is a bonus.

The store has been here for about a year and a half. We stock a range of different products to most shops so we’re different to what you see in every other store.

We carry Leatt shoes and clothing, DeVinci bikes, DK and Orbea. We also stock a range of BMX race brands and Box components.

Any shop fit-outs or changes this winter?

We’ve just done our upgrades. We’ve re-arranged the shop, moved the workshop location and created more space so there’s more showroom and workshop space as well as a better layout for the store.

We now have three workshop stations.

Robert Stocker from Salter Cycles in Altona Meadows, a western suburb of Melbourne, Victoria said:

At the moment it has been completely dead. We’re only doing online. The store is shut. We have been completely locked down. We’re only working on servicing and online sales.

We’ve been locked down for two weeks. This is our third lockdown. We’ve been quite busy every time right until the lockdown and then the tap just turns off.

I mean, bike shops have had a bumper year. You can’t say that we’ve done bad, really.

We’re still doing click and collect sales and online sales.

We’ll be opening again tomorrow, with restrictions. We’ll have QR codes in the store. We’ve got a limited amount of people that we can have in the shop, per square metre of the shop and people are supposed to stay within their own personal radius (maximum travel distance from home) which we don’t have to police. People are only allowed to go 25 kilometres.

Any shop fit-outs or changes this winter?

We’re forever changing. Getting on top of all the loose ends, while we haven’t got any people in the store, just tidying the store up, basically.

We’re not doing major fit-outs or anything like that.

Daniel Kapetanovic, of Bicycle Centre Hawkesbury, in Richmond one hour north-west of Sydney NSW said:

Well it’s been very strong for the last… well since covid broke out obviously, it’s been pretty good for all bike shops. Specifically, coming into May it certainly tapered in sales.

Our workshop is still strong but our sales side of the business has gone into a traditional winter, albeit a little bit stronger than a pre-covid winter.

We’re broad in the bikes we sell. We’re heavy in mountain and e-mountain, although in saying that we still do a good amount of road bikes and we cover all aspects of the family market.

We’ve always had the approach of trying to be as broad in most categories as we can be.

Being a Bicycle Centre we do all of the Advance Traders brands and we also deal a lot with Sheppards, so we do Scott bikes. After that there’s the smaller brands we do a little bit with including Jamie Walsh with Jamis and Richard O’Hara with Southern Cross.

Advance Traders have taken good care of us with stock. We’ve been very fortunate to have them as our key supplier and they’ve worked hard to keep us supplied and enabled us to capitalise on the demand that was there for the past 12 months roughly.