What cycling industry turbulence and deep discounting could mean for you
A total of 1.55 million cycles were sold in 2023 – the lowest the number has ever been since 1985 when the BMX bike bubble burst. In the decades following, bike sales have stabilised, with the UK cycling industry selling an average of 3 million units a year."We all believed our industry was going to be, you know, 10-20% bigger than it was pre COVID, and the reality is obviously that at times in the last few months, it's dropped below 2019 levels.
This indicates that margins on sales are very small, and there might still be an oversupply of those bikes.Talking to the cycling industry retailers, it seemed that most of them had expected sales to be higher than they ended up being, even if they knew the huge boom in 2020 was not going to last. This then put the whole industry into a bit of a mess, because the belief the industry would emerge even a fifth bigger than it was before the pandemic got busted.
The effect of the slashed pricing is most tangible at bricks-and-mortar bike shops, especially smaller ones. Fluctuating prices and hefty price drops have left customers coming to the shops with unrealistic expectations of the prices, and if the shop cannot match those, they lose the sale. Others echoed this, saying if one brand offers massively discounted stock, it's hard to sell bikes that are not marked down.
Whittingham believes that prices are going to get to the"right level" sooner rather than later when inflation of the prices stop – though the high-end models are likely going to stay affordable only for the very few.Whittingham says:"As we're settling into what 2024 model pricing is going to be, you know, we are seeing some reductions as costs are back under control and inflation is down so, I think it is a great time to buy a bike.
David Ward, Giant UK's product manager, says:"There're certain key price points that we want to try and enforce. But because of because of the time delay between the concept of the bike and speccing it and what can happen globally, between then and hitting the shop floor we don't always hit that retail price point.
Once the bike has been manufactured shipping costs are imposed. With established transport links, the process should be relatively straightforward, but with the current geopolitical situation, even the price of a container isn't guaranteed. "How many bikes we're getting into a container varies depending on the size of the bike, you know if it's a kid's bike versus a big e-trekking bike for example, but we work on an average of about 200 bikes per 40-foot container. That increase at the moment is about $5 per bike, but we haven't adjusted the prices on the bike loads or something because we're seeing that as a temporary situation.
With increasingly technical bike builds, more and more modern bikes are marketed similarly to our everyday tech items such as smartphones and computers. If the retail price of the newest model isn't higher than the previous model, the consumer might think it's not worth buying. Manufacturers and retailers alike must balance pricing strategies to maintain competitiveness without compromising long-term profitability – especially on the bricks-and-mortar level, where keeping stock in stores might become a thing of the past, as one industry expert predicts: