Has the cycling boom turned to gloom?
The bicycle industry, like many others is currently in the middle of an ongoing global supply crisis as everyone is aware. This crisis has caused widespread material shortages and production problems for many brands. The root causes of this problem are varied, but reasons given by many suppliers include transport material cost, material shortages, COVID restrictions which are ongoing in some parts of the World and the war in Ukraine driving fuel costs up.
Not everyone has benefitted from the COVID cycling boom.
Small businesses and customers have been hit the hardest by this crisis, what stock there is has been snapped up by the bigger outfits with more buying power. Despite the boom some shops closed down, not through lack of demand, but the lack of available stock.
Unlike many industries the cycle trade has certainly seen a boom during the pandemic, with sales of new bikes increasing dramatically, however it’s beginning to feel like that may be over.
At the same time with the increase in new bikes sales seen in 2020 and the cancellation of pretty much the entire sporting year, the demand for repairs seemed to fall, certainly they did for us and a similar story was told by many of our trade partners. Whilst those new bikes will obviously need repairing, the lack of parts has caused more problems downstream.
As things stand many suppliers are still quoting well into 2023 before certain lines are re-stocked.
How long will it last?
It is unclear when the situation will stabilise, but it is expected that the bicycle industry will see a significant decline in demand within the next year. This decline is likely to be exacerbated by the rising cost of living, which will make it increasingly difficult for people to afford new bicycles, perhaps even to repair their own bikes or to travel to trail centres at the weekend.
“The current situation is unprecedented and very challenging for the whole bicycle industry,” said Stefan Wolfram, CEO of Canyon Bicycles. “We are all working hard to find solutions and get through this together.”
Claire Fleischer, CEO of Bosch e-bikes, said in September 2021 that they “have had a hard time since last year to handle the shortages” and that they “expect these to increase even more in the next 12 to 18 months”.
“We are seeing a significant decline in demand for bicycles,” said John Burke, CEO of Trek Bicycles. “This is due to a number of factors, including the covid pandemic and the resulting economic recession. We expect that this decline will continue in the short term, but we are hopeful that it will stabilise in the longer term.”
Issues with shipping container availability and cost has meant that the cost of shipping has increase almost 10 fold since 2019 and exports out of Shanghai are down 20-30% since the start of their most recent lockdown. This means the sub RRP prices we cyclists have become accustomed to are becoming harder to find.
The current situation is clearly unsustainable but I think the demand for cycling will remain long after these challenging times have passed. My prediction is that the hardest hit in the industry will be bike manufacturers and larger retail/repair outlets with larger overheads and whom are more reliant on retail sales.
All those new bikes from the 2020-2021 boom will still need repairing. The smaller independent outlets, with the support of their loyal customers and their lower overheads, may just rise from the ashes if they can source the consumables they need to keep things moving. Moreover as the cost of living increases some may choose cycling as their mode of transportation meaning more opportunity for some within the trade.