How's Business? December 2014

Most shops were busy with Christmas customers when we recently called them for this month’s ‘How’s Business?’
With the summer season in full swing, our follow up question this month was, ‘Of the three summer months, which is your biggest for sales, December, January or February?’
If our small nationwide selection is anything to go by, January has been growing in importance each year, but December is still number one.

Neville Withall of Cumberland Cycles in the inner southern suburbs of Adelaide SA said:

It has gone a bit quiet leading up to Christmas. October and November were very ordinary compared to what we’re used to seeing. You can bet your boots, the rumours I’m hearing going around is that almost everyone is about 30% down on what we should be doing.
I think there’s been a fundamental shift in the marketplace, personally. That is that, and this could vary from shop to shop depending upon your main clientele I guess, but kids are not interested in bikes anymore… very few anyway. Some are of course, but the great majority are not.
So we’re not getting the kid’s market like we used to leading up to Christmas and this time of year you don’t sell all that many adult bikes anyway. They drop away because the parents are committing to Christmas expenses. The adult market comes back in January / February.
Up until the 1980’s and 1990’s every kid had to have a bike, but it’s just not the case anymore. I think you’ll find that’s the reality if you really look into it.
My main market now is the adult commuter type bikes: flat bars, urbans. Mountain bikes are fading away compared to what they used to be, once again because the teens and the 20 year olds are not interested in bikes in their masses. You’ve got your hard core of course, but relatively low numbers compared to what we would have been seeing in the 1980’s and 1990’s.
Apollo would be our main brand and Jamis as well. Plus I do PowerPed electric bikes and also Easy Motion electric bikes.
Of late, once again in the general scheme of what I’ve said about sales being a bit poor compared to what they should be, even they’ve dropped off. And the electric bikes are a completely different market. They’re a whole new customer base.
The part I can’t understand is that the September quarter was actually quite reasonable. But it looks like the December quarter is going to fall down.
The Governor of the Reserve Bank has made numerous comments over the past three to six months and I’ve also heard some bank CEO’s make similar comments. He’s said that it will be many more years until retail returns to what it was pre GFC. The future isn’t all rosy for the short term for a number of reasons.
Even repairs are a bit slower than they used to be. I think bikes require less maintenance.
(Regarding the best summer trading month) January is the most profitable month, always has been. Hopefully always will be. The reason for that I think is that a lot of adults could be working overtime leading up to Christmas… don’t get out to do any shopping for themselves. A lot of them have holidays in January. That’s when they might go out and spend a few bucks.
Hopefully that can go through to February. Over the years I’ve noticed that February can sometimes collapse, but generally January and February are the most profitable months now. Once upon a time I would have said December, but that isn’t the case now.

Matt Irvine from BikeForce Cannington, in the southern suburbs of Perth, WA said:

Business is good. It has been steady. Very similar to last year. The past few months have been a bit patchy, up and down, but overall it’s still going well.
I can feel it (the general Perth economy) slowing a little bit, but this time of year in December it does definitely pick up.
Our core brands are Merida and Norco. We touch on Malvern Star for kids and entry level bikes. We also do a fair bit of road bikes as well. We do Pinarello as well as Merida in the way of road bikes. We go pretty high end, which certainly helps in the end of year summaries.
(Regarding the best summer trading month) They actually all run very closely. It seems to continue on in January. January and February are still quite busy, but I think December trumps the two first months of the new year. To me it seems like it picks up more in January than it used to. We’re still selling the usual general purpose mountain bikes and hybrids in January.

Andrew Swann from Yarra Valley Cycles in Lilydale, in the hills to the east of Melbourne said:

It’s going very will thanks. Mountain bikes certainly form the biggest part of our business, but we still do a lot of road and we still do a lot of cross trail, general purpose mountain bikes as well.
Earlier this year we sold the Pakenham bike store that we had to our eldest son Matt. Matt used to manage this store (Lilydale) but he took over the Pakenham store four or five months ago.
We’ve had the Lilydale shop for nine years now. Giant’s probably our biggest brand. Norco, Lapierre and Kona are probably equal across the board in terms of units. Then we do a lot of Pivot in the medium to long travel mountain bike scene and we do a few Niner bikes as well.
Of road bikes we do a lot of Giants. Probably 60% Giant. The rest is Lapierre but we also do a lot in cyclocross with Giant, Lapierre, Kona and Norco in the cyclocross / gravel grinder.
From our perspective, being in this location, the gravel grinder type of bike has become very very popular. The Kona Jake and Jake the Snake have been enormously popular out this way, as has the Norco with their Threshold. They’ve been really popular bikes for us. The Giant with their cyclocross range as well, the Revolt and the TCX. They’re a good package. Very good value bikes. And out this way, because we’ve got such a good network of trails and dirt roads, they’re a good bike to focus on as well.
Ash manages the store with Alex backing him up (Andrew’s sons) and another family member, Joel, that’s Ash’s brother in law and myself and a few others. There’s six full time staff here.
We’ve been so busy in this shop lately that we don’t have time to scratch ourselves!
(Regarding the best summer trading month) We certain sell a particular type of bike, a lot of them in December. What we class as the Christmas bike. That is a bike up to about $1,000. That’s December. But then after that, in January and February we do start selling more of the higher end bikes, so the longer travel dual suspension mountain bikes and more of the mid range to higher end road bikes as well.
I think it’s fair to say that December is still the biggest of the three months. It also counts for the highest number of units.

Kevin Turvey of Strathpine Bicycle Centre in the outer northern Brisbane suburb of Strathpine said:

For the start of December, just normal Christmas sales. A lot of people looking still. It will be a last minute Christmas rush again. Kids bikes are very popular this year, along with the entry level mountain bike range, up to about $500.
The road bike market is very stagnant at the moment due to a lot of old models being cleared out from wholesalers. We’re seeing discounting across the board for all brands, just mainly on the road.
We’re predominantly a Giant dealer. We do Malvern Star, Redline, Mirraco… that’s about it.
We’re coming up to 30 years here. I started it from scratch. It’s still enjoyable, to see the changes in the industry over the years from the Repco Traveller, Malvern Star Flite era of 10 speed racers to alloy mountain bikes to carbon fibre road bikes. There have been massive changes. But the bike, for what it entails manufacturing wise is still fantastic value for money.
We go up to $5,000 for road bikes, same for mountain bikes.
(Regarding the best summer trading month) It’s always maintained the same. February drops right off with the kids going back to school. Mum and dad have had the holidays and they get the credit card bills! February is normally a very quiet month.
January is normally good to steady trade. December is always busy, but these days parents have a lot to choose from for Christmas with electronic games, iPhones, music downloads etc.
The poor bicycle is up against a lot of electronic Christmas gifts as well. There’s not much you can do to counteract it. They either want a pushbike or an electronic game.
I think a bit more push with the media saying they want children out and about more as opposed to just sitting in front a computer screen, sitting at home. The bike’s still there, but it’s a lot tougher.

Matt Turner from Bike Ride in the city centre of Hobart said:

Business is great. Like clockwork, as soon as spring hits, we see a big jump in the people coming into the shop. You have your regular demographic, your core riders, but spring seems to attract a whole raft of new people coming in. Then it keeps building and growing over summer, so it’s really strong.
We’ve seen a big uptake across all areas. People commuting. People changing from one fitness activity, whether they’re doing gym or something else, or looking at adding cycling into their lives for some reason or another.
We’ve just moved into new premises. It’s a different layout. We’ve jumped the wall, so to speak from 74a Liverpool Street to 74 Liverpool Street.
Now the shop is all on one level. Our workshop is now at the back. It’s a much better, cleaner layout and there seems to be more space for customers once they’re in the shop to engage with the staff or look at products.
We outgrew our original space, which was to do with adding new products and items. We got to the point where we couldn’t effectively display everything we had. The new premises allow us to think about what we currently have and how we want to do things better. It’s a big shift in how we present and how we engage with our customers.
We moved on the first Monday of November. We threw open the doors at 9 am. It was a good two months of work that went into the fit-out. We kept trading next door. We finished Saturday afternoon in the old premises, started packing up and had a very long weekend filling out the new shop.
(Regarding the best summer trading month) December is always big. It’s hard to ignore the extra people who are coming in and grabbing stuff for Christmas. But February is a great month. We tend to have a late summer, so there’s some beautiful weather late in the season and there’s a lot of people thinking still about buying bikes, so February is a good month for us. But December is always going to be your trumps in dollar sales, absolutely.

Aaron O’Grady (no relation to Stuart) of Cyclery Northside in the urban hub of Chatswood in Sydney’s northern suburbs said:

Business has been pretty good here for the past few months. We’ve been picking up month by month here leading up to Christmas.

I’ve been here since May and have been doing the ordering and management role. I was actually here eight years ago. When I first left school I spent three years working here.
We are still a Specialized concept store. We have phases of mountain bikes or road being more popular, but overall we’re pretty even keel across all types of bikes. We sell about the same of each.
Urban bikes are a stronger segment since I’ve been away and come back. We get more requests in that hybrid, commuter style of bike for sure.
(Regarding the best summer trading month) I’m not aware of it changing and I’m going to say definitely December is the best. We do laybys which in December which are fairly popular, especially in kids bikes, but overall we don’t get a lot of laybys.