Save your local bike shop this Winter

Black Friday is upon us and soon Christmas shopping. This is a plea to direct your cycling purchases to your local bike shop, trust me when I say they really need it.

It has been a terrible year for bicycle retail. It’s not just the online giants like Wiggle and Chain Reaction (speaking of the UK market) being affected, the equipment manufacturers like Shimano or not even the bike manufacturers, your local bike shop has also felt the squeeze more than any of them. 

Really tight bike margins squeezed even further

Margins have always been tight in cycling retail. Nobody is selling with large multipliers like in fast fashion retail. A bike shop, before the crunch, was lucky to make a 30% margin on a bike before paying taxes. 

With the oversupply in the market (manufacturers making too many bikes) and heavy discounting by online retailers (retailers ordering too many bikes then needing to clear stock), a bike shop these days is likely to make a 10-15% margin on a bike sale. That is only €100 per €1,000 of bike (before taxes). Many bikes need to be sold everyday to pay for rent, staff, utilities and more.

Here lies the second problem, demand for bikes is down an unbelievable amount since the COVID boom of 2021 and 2022. It’s actually incredible the difference experienced at a shop level in just 1-2 years.

Why is it acceptable to ask for more and more discounts in bike shops?

It would be a strange concept asking for a discount at all in the supermarket, a fashion store or generally most retail establishments. Yet in a bike shop it is accepted and regularly abused – why is that? 

I´ve asked some customers and the general feedback was that perhaps it’s because the margins are high enough for discounts, which goes completely against the reality! 

The problem has been exacerbated this year with heavy online discount prices being the starting point for bargaining by customers.

Bike shops can not hold stock anymore

If it was ok to hold bike stock the last few years due to high rotation, it is not at all ok now. Due to the low margins and slow rotation bike shops need to run a low stock and depend on distributors to carry extra size, colour and groupset variants. 

Customers still want a bike quickly, even more so now that there is a lot available online, so it´s important to have a great relationship with suppliers. Many of the big brands are still expecting large bike implantations for 2024 to maintain a healthy margin.

It’s not all doom and gloom!

It is important to accept the current shortfalls in the new bike market, however Eat Sleep Cycle has seen an impressive growth in cycling kit and accessories in 2023 compared to 2022. We believe that the new cyclists that purchased bikes in 2021 and 2022 are out riding their bikes and want to style up and accessorize.