Welcome to our monthly survey of bicycle shop owners and managers across Australia where we start by simply asking, ‘How’s Business?’
We had about as much geographical spread as you can get in Australia this month including stores in far north Queensland, south west Western Australia and southern Tasmania.
As always, this month we also asked a follow up question. With the news we published here last week that bicycle imports into Australia are down a massive 20% for the first nine months of 2016 compared to the same period in 2015 we were wondering if we could get more idea of how much of this decline might be due to the running down of overstocking and how much is declining retail sales.
Therefore we asked, ‘How many bikes do you think you'll finish selling this year compared to last year?’ Of course, six shops are not enough for a statistically valid survey, but the responses were interesting all the same.
Graeme Fielding of AvantiPlus Cairns in far north Queensland said:
Business has been very good. We’ve had a very good year. We’ve had good weather, but we need rain up here. It’s terrible. We’ve got the wettest part of Australia but we’re on drought restrictions.
The dry weather has certainly helped as far as retail goes, but the economy up here needs water. We didn’t get a wet season this year. We get all our rain in January and February, but we didn’t get it.
The city itself is going along very well. There’s no question of that, but we just need a wet summer.
Tourist trade here in Cairns for the past couple of years… I live right in the middle of the city where the tourists go for their meals and I would say that the city has boomed, with the restaurant trade. It doesn’t directly effect us as a retail outlet, but the offshoots, where people work at the resorts, in the hotel trade, that provides them with plenty of employment, so it does help.
We sell everything from $200 bikes up to $10,000 - whatever people want. But it’s more in the market that appeals to most people. If they come into our shop, they’ll go out with a bike.
They’re not going to walk in and the cheapest bike is going to be $1,500 or that they’re going to be looked down at unless they spend that sort of money.
We’re more in that family structure we’re people can come in and walk out with a product.
(Regarding bike sales compared to last year). We would be up on last year. We probably sell more bikes than anyone in Cairns, not in dollar terms, but in numbers we would. Purely because of the size of the business - we’ve got 750 square metres. That’s a big shop. As far as the set-up goes, it’s probably the best set-up structure you can have in a bike shop.
We employ six staff in total.
Peter Verleys-donk of Bikes De Ver in the inner north eastern suburbs of Melbourne, Victoria said:
I would say business is very tight because of the over saturation of stores, particularly in this area. Since 99 Bikes has appeared (nearby) it has definitely got substantial tougher, but I do think that their business mould, particularly in Victoria, will survive, because there’s too many shops. They’re (99 Bikes) running costs, at the end of the day are ‘consumant’ (sic), where the independents, we can pull our heads in and tough it out.
We’ve toughed it out before when other newcomers have come and went by the wayside. A prime example would be the Goldcross empire and how that collapsed.
All we do is just sit and wait. Keep our costs down and eventually what will happen, these other big operators with all their fancy managers and expense, expense, expense will consume them.
Their bottom line will suffer and they’ll realise that it just wasn’t worth it.
I’ve been around in the bike industry since 1976, other than my days with the great, famous Bates Cycles where I got brought into the industry in the school of hard knocks. So I’ve seen it all.
I owned the original De Ver in the UK as well and I still have some business interests overseas in Holland and so on.
We still do a few De Ver track bikes, but even that side of things has become much harder, mainly because of the internet. Let’s face it, successive Federal governments keep their head in the sand. The immoral practice that the government has applied over the years – why is it that I pay GST and company tax when somebody can bring it in from overseas for nothing? Just morally wrong.
(Regarding bike sales compared to last year). We’ll probably be 30% down on last year. We import our own bikes as well. We’re definitely well down the pan and that’s a fact. Anyone else who says they’re doing well is either living in fantasy land or they don’t know figures, because I can tell you straight away… definitely down.
We carry a lot of different brands. Being an independent dealer we try and source from lots of people. We try to surf and get the best possible deals that are about.
But sometimes you’ve got to move from company to company because one company will give you a honeymoon, but when the honeymoon is over mate… there’s no more deals or there’s no more this or that.
Dave Richardson of Panther Cycles in Penrith, a regional city and commuter area 56 kilometres west of Sydney, NSW said:
Our last quarter has been very solid for us. It’s been very consistent. We haven’t got one category jumping out. It has been consistent across the majority of our categories across the floor.
We’ve been Giant and Cannondale for 24 to 26 years. We’re doing a little bit more with Pon, so that would be Focus and Cervelo. Echelon and Monza we’ve had the connection with SRAM, and Shimano. We’ve been here for many, many years. We don’t change a lot of our suppliers. We think it’s a two way street. We try to be very loyal to our suppliers. We hope that the favour gets returned. We’ve worked very hard on those relationships.
We really work hard on our accounts. Paying on time. Taking any advantage with early settlement and things like that. That’s how you get by in small business and improve your margin.
We have four full time staff plus another four casual. Gavin our mechanic has been here longer than us. He’s part of the furniture. We’re a retail shop but you’ve got to treat everyone like family. It’s not just selling bicycles, we’ve got to have fun too. We’ve got to make sure everyone has got careers here and everyone is looked after as well.
(Regarding bike sales compared to last year). On our figures at the moment our units for the end of this year… we’re going to be down about 10%. But the spend on the bicycles is greater.
Imports might be down, but when we look at some of our suppliers who might have been carrying excess stock, we’ve been really working hard on our buying. Really making sure that we’re looking at their specials, looking at what we can take advantage of. So in that mid-range to higher end bikes, we have had the ability to buy some higher end bikes and still hold our margins, but get our customers up from that midrange bike to the next level.
A customer who might have been a Shimano Tiagra person, we’re getting them up to that 105 model. We’ve pushed that up a bit, so even though units a down, the spend is better.
Nav Coole of Impulse Cycles, in the south coastal regional centre of Albany, WA said:
Business is pretty good at the moment. We’re busy with Christmas on the way. Road is pretty well dead here at the moment. Mountain biking is on the boom – lots of recreational stuff going on and trail development happening in town as well.
We’re right at the very end of the Munda Biddi trail (the longest MTB trail in the world which runs 1,000 km from near Perth to Albany). We do get a bit of business from it, not a lot, but we do see tourists come through from time to time.
We’re almost a Trek concept store, but we do a little bit of Felt and Focus as well. We target mountain bikes, road, ebikes and recreation as well. We have two of the new Trek ebikes on the floor. We’ve sold two of them so far.
(Regarding bike sales compared to last year). Bike sales are better this year than last year. The last two years have gotten better. The town itself (Albany) is getting more infrastructure in place and becoming a more bicycle friendly town.
There are three bike shops in town. It’s quite interesting. We’re the biggest bike shop in town by quite a long shot. We seem to be going pretty well. I’m not sure how the other two shops are going.
Kevin Excell of Brooks Cycle Depot in Murray Bridge, located on the Murray River, 75 kilometres south east of Adelaide SA said:
Business is better now! (laughs) The winter was pretty crappy and up until about the first or second week of November it took to get going. It was pretty ordinary up until then, but now we’re underway.
The shop has been in our family for 88 years. My uncle started it in 1928 and he was here until 1953. My dad took the business over in 1953 and he was here until 2004.
My dad passed away in 2004 but he worked up until the day he died. He just turned the lights out and went. It was a bit of a shock to find him but that’s a great way to go.
I came in in 1981 and we worked together until 2004. I’ve been on my own since. It’s been a while. We’re probably the oldest shop in South Australia still run by the same family. Super Elliots is no longer run by the Elliot brothers.
I do a whole range of bikes from kids bikes right through road bikes and mountain bikes. But mostly hybrids and mountain bikes is where my market is and BMX as well too.
I do Giant, Felt and a range of BMX brands – lots of them. I do it just by myself without staff.
(Regarding bike sales compared to last year). I would say it would be less, but I can’t give you numbers. I think it’s because the winter was so crappy.
We sell pretty much the same value of bikes because the dollar has stayed pretty stable an prices haven’t varied much. Murray Bridge is more of a lower socio economic area.
Matt Turner, of Bike Ride, located in the centre of the city of Hobart, Tasmania said:
Business is good. Obviously we’re in the middle of summer and the lead up to Christmas, but everything is going well.
We’re coming up to our second year in our bigger shop. (They moved from a much smaller premises next door). The move has been fantastic. Really good. It improved our layout and presentation and dramatically changed the shop. All the feedback has been positive from our customers, which is really what it was about – giving them a better experience when they walk into the shop, so it has been great.
To some degree, you always deal with certain constraints on product supply. It tends to be on the change over from model year, in this case 2016 to 2017 which happens August to October. As one model year runs out sometimes there’s that gap before that next model year stuff actually lands in the country. So we’ve had a few model year supply constraints which you just deal with as best you can. You just make sure you’ve got some alternatives in place. You generally know when there are going to be some limitations.
Sometimes you can’t do much about it, but you try to forecast as much as possible, knowing that everyone’s keen to see new gear. If there’s any chance of getting even small amounts of it in, which some of the companies do before they have a big drop shipment, coming into summer – we try to grab it.
Some of the bikes aren’t coming in until January. Everyone’s keen to get them before the end of the year. January seems like a long way away, half way through summer. But again, a lot of people, if it’s the bike they really want, they’re happy to wait a couple of extra weeks. Or if it’s a new helmet, pair of shoes or something like that.
Even though we’re a small shop, we try to have some options for people. Specialized is our core brand covering kids bikes right through to road and MTB race bikes. But then we sell Byk from Kid’s Bike Company, and then we’re also a Cervelo and a Rocky Mountain dealer.
(Regarding bike sales compared to last year) I’ve actually got no idea. I’d have to dig through some sales receipts. We’re probably just a touch under this year, I reckon. A few years ago year on year we were definitely selling more. Then we saw it plateau but we saw the unit price go up. Same number of bikes but more per bike.
This year, maybe just a touch under. Some of that can come back to bike updates. Models that haven’t had an update for a while slow down a little. Bikes that have push through a little more.
A few of the prices have gone up, so people ‘umm and ahh’ a little bit, but overall prices are probably the same as last year.