Bike shops in the US have been on a rollercoaster ride akin to the Tour de France, with the pandemic years bringing a whirlwind of highs and lows.
Initially, as the pandemic hit, there was a massive spike in cycling interest that saw sales soar by 64% to $5.4billion in 2020, Circana’s retail tracking service reports. Some stores were even shifting over 100 bikes in mere days.
But the good times didn’t roll on forever. Supply chain woes linked to the pandemic meant that once shops had sold out, they struggled to get new stock. Now, with inventories replenished and demand for new bikes dwindling, manufacturers are cutting prices to offload surplus stock.
It’s a challenging climate for bike retailers, though sectors like gravel and e-bikes remain promising. “The industry had a hard time keeping up with the demand for a couple of years, but then demand slowed as the lockdowns ended, and then a lot of inventory started showing up,” Bicycle Retailer & Industry News’ editor-in-chief Stephen Frothingham observed.
“So now for the last, a year and a half, the industry has struggled with having too much inventory, at the supplier level, at the factory level, at the distributor level, at the retail level.” Despite booming sales during the pandemic, bike shop owners are facing challenges due to the shift to remote working and competition from larger retailers.
In 2023, bike sales reached $4.1billion, marking a 23% increase from pre-pandemic levels but a 24% drop compared to the peak in 2020, according to market research firm Circana. National retailers like REI and Scheels are showing faster recovery compared to independent bike shops.
Independent bike shop owner John McDonell shared his experience, noting that the shift to hybrid work has significantly impacted business, with daily bike traffic dropping by more than half on his street in San Francisco. Data from Placer. ai, which tracks movement based on cell phone usage, reveals that San Francisco has the lowest office occupancy rate among major cities, with office visits in April 2023 still 49% below pre-pandemic levels.
“Our downtown is still a wasteland,” McDonell said. Independent bike shops also face increased competition from both national chains and major bike manufacturers like Specialized and Trek, who are increasingly selling directly to consumers through their own stores.
Reflecting on the situation, McDonell expresses his frustrations: “They’ve got the money to absorb the fact that bike stores, you know, are not a super profitable thing, and in the process, they’ve also been able to cut us out of it,”.
McDonell has had to reduce his staff to a bare minimum, dwindling from five employees down to just himself and another. His aspirations of selling his well-loved shop to a new generation bicycle enthusiast when he retires seems to be a vanishing prospect, with the possibility of shuttering the store once the lease is up becoming increasingly likely. “Now I am just trying to land it with both engines on fire and trying not to lose money on my way out,” he confides in despair.
Douglas Emerson, who owns University Bicycles in Boulder, Colorado, finds a degree of solace in his location – one of the most popular biking destinations in the country. Having been proprietor of the store for 39 busy years and currently employing thirty staff members, his business is in a relatively stronger position.
Emerson echoes the phenomenon experienced by other bicycle shops during the prime of the pandemic, the overwhelming surge in sales leading to rapid depletion of inventory. They reached a point where he sold more than a hundred bikes within a span of two days.
However, post that peak period, the pace slackened as stocks decreased and the demand for rentals died since travel had ceased. “It became a struggle right after the boom,” Emerson shares. “And since then, the manufacturers have overproduced. And they’ve slashed prices dramatically which is good for the consumer. But with the small shops they’re often not able to take advantage of those prices.”
Emerson claims that his shop reached a “saturation point” all those in dire need of a bike managed to buy one. Now, the retail focus has shifted from bikes to accessories including helmets, clothing, and locks. His shop’s sales have now returned to their 2019 numbers.
One bike retailer, University Bicycles, reaped benefits as consumer purchasing behaviours shifted. A sustained interest in e-bikes and growing demand for childrens bikes offered the company some relief. Furthermore, gravel bikes, designed for both paved and gravel roads, have become more popular than traditional road bikes.
John Ruger, a seasoned cyclist with five decades of biking under his belt and a loyal customer of University Bicycles, is eager to take advantage of falling prices. It’s been 10 years since he last bought a bike but he has set his sights on a top-tier gravel bike which previously sold for between $12,000 and $14,000, now retailing at a manageable $8,000.
Ruger believes it’s the perfect time to buy, saying, “The timing is good,” also stating, “I can get a bike now because they’re less expensive and my bikes are getting old.” Shawna Williams, owner of Free Range Cycles in Seattle, Washington, had a different experience. Operating out of a modest 700 square foot shop, she operated on an appointment-only basis from March 2020 to May 2021.
Consequently, her business didn’t enjoy the same sales surge as others. Nevertheless, Shawna had to contend with stock shortages, having to occasionally procure merchandise from other shops, even at regular retail prices, just to maintain repair work or get builds done.
She pivoted her business strategy by expanding into additional services such as repairs and maintenance to compensate for the dip in bike sales. This savvy shift allowed her to maintain consistent overall sales even during the pandemic.
“Bike sales, the way that I have kind of framed the shop, are an awesome bonus, but we really need to be sustaining the shop through repair and, like, thoughtful accessory sales,” Williams explained. “A bike sale to me, if we do things well, that means creating a customer for life.”
