How’s Business? May 2021

Welcome to our monthly chat with bicycle shop owners and managers across Australia and New Zealand. As always, we start by simply asking, ‘How’s business?’ 

This months follow up question was, ‘How do you think the coming winter season is going to compare to last year’s?’ 

Troy Reilly of Sprung in the centre of Launceston, Tasmania said: 

Mate, business is as good as it could be, I reckon. The world’s a little bit weird, obviously, but it’s skyrocketing for everyone at the present time. 

We’re a high end, mountain bike specific shop. We designed the business around mechanical, mainly, being the one thing that you can’t get online. 

We have our own suspension service centre. We build custom bikes and sell high end brands. It’s just nice to deal with good quality stuff. 

I purchased it off the previous owner 4 ½ years ago. At that time it was an everyday bicycle shop, still a little bit more mountain bike focussed, but not solely. 

Rob Potter invented the name Sprung about 10 years ago. I’d love to claim that idea but it was Rob’s doing.

Winter season:  

That’s a good question! It’s very weather dependent down here in Tasmania, but in general, I think we’re going to be good. Last year we had covid. Tasmania – we were pretty lucky down here, it was business as usual for most people at that time. 

This year I think it might be a bit of a struggle just due to supply and demand from the industry. Most bike shops, I think if they’re doing it well, are carrying pretty good stock levels. But the push-out for products… the lead times are getting pretty strung out now. It’s very hard to gauge what’s going to happen – a month by month thing for us. 

Rocky Mountain is nearly sold out. Which is a good thing, yeah? I mean, that’s what everyone wants to do. 

Santa Cruz had a few issues due to covid along with those fires over there (in California) so their supply hasn’t been the best. But Yeti is still doing well. Paul Rowney is doing amazing things through Yeti, so our bike supply through him is still quite good in that high end market that we deal with.

We dabble a little bit in Cannondale, but it’s that brand where you need to have your floor full of bikes, which isn’t what we base our business around. We prefer to order or build the right bike for you. 

We sell eMTB’s. Rocky Mountain with the Powerplay, Santa Cruz with the Heckler and the Bullit. We missed out on them this year. We got one Heckler, but that supply was not big enough for the demand. 

I hope the industry can turn it around and do something with it. I don’t know how to fix it, but I’m sure they’ll be about to catch up soon… I hope they can catch up soon, is probably the better thing to say! 

Bevan Mason of Bike Fix in Townsville, far north Queensland said: 

It’s really good mate, really good. 

I’ve been in business for about six years. When I first opened up the shop, I was just going to be a workshop only, just a service based business. But then a few of my mates and myself wanted to ride nice road bikes and I was friends with the Pinarello rep at the time, so I started doing a few boutique builds and then it grew from there.

Now I’m doing about 15 different brands. I’ve done so well with Pinarello that two years in a row they flew me over to Italy until last year. I did the Pinarello Gran Fondo.

Cannondale took me to America a couple of years ago to check out everything over there with them in Connecticut (USA). It’s been really good. 

I do heaps of boutique brands like Pinarello, Willier, Eddy Merckx, Chapter2. But Cannondale, GT and Mongoose through PSI were my main bread and butter brands. Now I’ve changed over to Sheppard brands, Scott, Avanti and Malvern Star. 

Toys R Us used to be across the road from me. When they closed down, I jumped on with Malvern Star and Avanti. 

I get all the cheapie Big W bikes that people try to bring in for me to fix. A lot of the time the repair cost is more than the bike’s worth. I do get sick of explaining this. Or you do a quote and people are blown away by how much it’s going to cost, but that’s just what it is, that’s how much the parts are… 

There was one other shop in town, Wes, he’d been doing all the cheaper stuff for years and years but he closed down a couple of financial years ago so I’ve sort of taken over a bit of that. It’s good when times are quiet but it does get a bit painful having to deal with that sort of clientele. 

Winter season:  

It won’t compare at all! At the beginning of last year, I thought I was never going to buy a house. I’d always said to myself, ‘I’m just going to rent for the rest of my life.’ 

I’m a Kiwi, so I always thought I might move back to New Zealand one day. But when Covid hit, with everyone buying bikes like they were, I went from changing my mind to actually thinking about buying a house. So I started looking at houses around the $300,000 mark, but after a couple more months I had enough deposit to buy a $400,000 house. (Editor’s note for Sydney and Melbourne readers – yes you really can still buy a nice house in Townsville and many other towns for these prices!)

That’s how good last winter was. 

This winter’s not going to compare because there’s no bikes available. I’m lucky because I pre-ordered so many bikes last year. A lot of them didn’t come but I run such a good account that they’re fulfilling all that pre-order stuff still, so I’m having bikes randomly turn up.  

Because I’m so good at paying my account they email me and offer me stuff that’s coming up before they offer it to shops that don’t pay their bills.  

I don’t run an account at all. When they send bikes, I pay straight away. I just don’t like owing people money.

I don’t make a massive profit – gone are the days of that. I used to work for Shane Hendren at Velo in Brisbane back in the days when you could make big money. But riding bikes is what I do and spend my money on. 

Glen Ward of Speedlight Cycles in Maylands, an inner north-eastern suburb of Perth, WA said: 

 Business is great! Repairs are pumping. P&A is quite good. Across the board, all pockets are quite strong, but obviously it’s a matter of stock pending for some lines. That’s pretty much the only hold up for the moment really.

We cater for all types of riding from kids, recreation, hybrids, flatbar road. Then at the higher end we’re more renowned as a mountain bike shop. We’re riders and race ourselves. At the more expensive end you’ll only find mountain bikes. You won’t find an expensive road bike in here. It’s not what we do, so we practice what we preach. We sell high end mountain bikes and ride high end mountain bikes! 

Winter season:  

Last year was all things covid, which is difficult to compare with. That was extremely busy. To be honest, I can’t see it ever being that busy again. But that’s unprecedented circumstances. 

I think it will be strong still, for sure. I think more people have found riding because of that situation. There still are restrictions. So people are spending money on recreation.  

Glendyr Casey from My Ride in the tourism and mountain biking town of Rotorua, New Zealand said: 

We’re ticking over. Stock has always been the biggest issue at the moment, but apart from that, bicycles still seem to be in demand post-covid. 

Lack of tourists – we normally have a lot of overseas people come in – that’s definitely noticeable in the P&A side of it. But there’s still a lot of visitors from New Zealand coming through and keeping us busy.

We’re predominantly bike sales. Our bike hire is only our demo bikes that we hire out if someone really wants to, but it’s not something that we push. We’re mainly retail and workshop. 

Scott is our main brand… and Avanti. We also do Norco. 

Winter season:  

I’m expecting it to be quieter. A lot of people probably have their bikes now. I hope I’m wrong!  

Provided we can get stock we’ll be ok. We’ll keep ticking over. We’re ok at the moment, but looking forward, if it’s really busy, it could become an issue. 

We get a lot of Australians come over here to go mountain biking and you’ll get groups in. So hopefully those people will be game enough (to travel to NZ under the new travel bubble rules) and their partners let them out to play. (laughs)

If all of a sudden the traffic light system they’re proposing goes red and they’re stuck over here with mum and the kids at home…  

Matt Tozer from Bike Society in Brighton, a beachside suburb of Adelaide, SA said: 

Obviously, it’s good. It has been hectic. I would say for most of the past 12 months it has felt like consumers have been desperate to get bikes. 

Now we’ve still got consumers that want bikes, but the desperation is not there. It’s still definitely a lot busier than would we would say was the norm, back in 2019. But there’s no longer people just walking in and taking anything that’s in their size. 

People are definitely kicking tyres but there’s still lots of people out there buying stuff. 

We’re selling everything. A year ago it was the everyday recreational bike. But now it’s more evenly spread out across the board of everything: ebikes, dual suspension mountain bikes, commuting bikes, roadies… 

There’s probably a little bit more of customers asking for discounts going on. I think that’s because they’re walking into shops and seeing that shops are starting to have stock again. So I think they feel like they’ve got that opportunity to try and leverage something.

But it’s still not like back in the day when it was just an expectation. I think that’s been good for the industry. When people were desperate, there wasn’t stock so there was no real leverage for the consumer. We were able to stand fast and say, ‘Nup, this is all you’ve got.’ 

I think going forward that will remain as a better thing for the industry. I don’t know how it (discounting bikes) came to be such a prolific thing… You don’t go to your doctor and ask for a discount. You don’t go to the supermarket, spend $200 on groceries and then say, ‘Can I get a better price on that?’ 

10% off might be 40% of your gross profit. 

Winter season:  

I think it will be quieter than last year. The pandemic last year was in full swing and there was that desperation because people were isolated, to just do stuff with their families. So it was more about buying a fleet of bikes for their family and doing that local stuff as a family. 

It will be quieter, I don’t think it will be back to the old days. But it will be solid. 

We’ve been isolated to South Australia. There’s definitely been a lot of weekend trips.

My mechanic has a property in Melrose (a popular mountain biking destination three hours north of Adelaide). He said it’s just packed every weekend there.

People are going down the Riesling Trail, they’re buying hybrid bikes or gravel bikes. 

Russ Phelan of Ultimate Cycles in the coastal city of Nowra, 160 km south of Sydney NSW said: 

Business is steady. The bike scene is pretty good here. We’ve got a pretty big customer base that stretches right down to Ulladulla and coastal areas in between. Cycling around the Jervis Bay area is extremely popular. (Editor’s note: This is a ‘sea change’ area, popular with retirees.) There’s quite a few residents down that way who have been re-introduced to cycling mainly through riding ebikes now, which is a huge part of our business. 

People are discovering new places that they didn’t know existed, because of ebikes, they can ride that bit further and explore different areas. They’re out on the bike more often than what they’d ever imagined. 

They’re semi-retirees to full retirees. Surprisingly we’re mainly selling them dual suspension e-mountain bikes. Not necessarily for the performance aspect, but more the comfort. They’re venturing off road. Getting away from the traffic and the noise and finding bush trails and things. With dual suspension, air adjustable, you can adjust it to give a cushy ride, and that’s what they’re enjoying. 

Our workshop is steady. We were frantic at times, with longer lead times for repairs, but it’s dropped off a little bit now. I think mainly because team sports are back on line again. So a little bit less bike riding perhaps. The weather’s cooling off, daylight savings has finished, so your traditional winter slow down… it’s a bit weather dependent. If it’s dry weather, people are still out riding, but if we have wet weather they’re a bit reluctant to ride. 

About eight weeks ago we moved into a new store that’s about three times bigger than our old one. We couldn’t wait to get out of the other little shop. 

We’re now about 500 metres south of the town centre, so it’s a bit further out, but it’s a much bigger space for very similar rent and now we have off street customer car parking.

Our customers have all found us here and are staying with us. 

This new location gives us a lot more wall space too and has the height potential for a mezzanine floor later if we want to. 

Winter season:  

I don’t think there will ever be anything like last winter. It was nothing like anything has ever seen, in terms of bike sales and repairs.

Whether all those bikes are sitting in garages gathering dust or out being used – that will be the big thing. I’d like to think that people will still ride and then carry on riding them into summer. Otherwise there will be a lot of bikes for sale in garage sales and on Gumtree and things like that. But it hasn’t happed yet. The second hand market is tight, I think mainly due to new bikes being a bit scarce. But once people can go and buy a new bike if they want to, they can sell their old bike. Who knows – it’s a bit of an unknown really, what’s going to happen.