All demand, not enough supply

The past year has presented many challenges for businesses across the cycling industry, facing shortages in supply following unprecedented demand. Rebecca Morley asks bike shop owners how they’ve fared and what things might look like in 2022

Looking back at the cycling industry in 2021, one issue that has been particularly challenging across the board is supply – with demand for bikes and accessories rising so high businesses big and small had to react fast.

But as the country slowly recovers from Covid, and we look ahead to a new ‘normal,’ how have retailers coped, and what does this mean for the future? “We are grateful that we are alive and recovering,” says Bikeseven Cycle Service’s Daan van Belzen. “Alas, we lost some loyal customers to the pandemic; both young and older. We grieve for their passing and pray for those left behind. Health wise, we all had one illness or another to cope with as well as the pandemic. This has affected the efficiency of our service sadly. Buying and keeping adequate stock levels has been a challenge and the whole scenario has adversely affected cash flows.

“Having said all that, with a sense of realism we also start the year ahead with a new hope. Bikeseven has always felt to be more than a box mover, our ambition is to translate our enthusiasm for cycling into the potential of new and revived cyclists. That is why we have embraced the e-bike revolution and in line with COP objectives, we believe in getting more folk out on their bikes. We don’t just see it as a gap in the market or a commercial opportunity – we believe cycling changes lives, for good.”

A global issue
One of the big challenges of 2021 was shortages in stock, with rising demand having knock-on effects along the supply chain. “The issue of supply is compounded by the fact that the problem is no longer localised, explains 7hundred’s Dave Butcher, in Windsor, Berkshire. “This is now global. No more competing for materials and bikes from UK stocks – we are all now in the same pool and the water is drying out.”

While stores and suppliers are doing their best to forecast what bikes and parts will be in demand, Butcher stresses that “we must all be prepared for any dates to slip in the coming months and years”. “We – like all those further along the supply chain – are working on estimates. Estimates based on the information currently available in the system. There are so many variables involved that nothing can be certain.

“We are in a chain that is hard to manage for everyone involved – not just us – and this makes delivery dates highly volatile. Compound this with worldwide transport problems, a shortage of shipping containers and space on aircraft and – coupled with the fallout surrounding Brexit – and some forecasters foresee that the carnage will continue until at least the first half of 2023. Brace yourselves!”

Shot in the arm
Covid lockdowns and the recovery period that we are now in continues to present lots of challenges, says Jon Dean of CycleStreet in York, but it has been the ‘shot in the arm’ the industry has needed – by injecting cash into those businesses that were brave enough to forward order when Prime Minister Boris Johnson told everyone to ‘get on your bike’.

“However, this has compounded the supply problems that we are enduring now where most UK residents are ‘over’ Covid and are beginning to forget that the rest of the world, particularly the less organised and or less vaccinated Asian economies, have any issues with Covid,” says Dean. “The boom and bust nature of supply currently is proving particularly stretching financially in a time of year when traditionally most businesses are buying as little as possible rather than stocking up for next year, because it is unlikely that stock will be freely available in spring when we traditionally schedule our deliveries.”

Andrew Manning, director at Cyclelink Services in the Surrey village of Thames Ditton, says that historically, the business ran a just in time model ordering up parts for repairs as it needs them. “Pre-pandemic, we could order one day and be fitting parts the next. “Supply chain issues have plagued all industries but the cycle industry has really suffered in 2021. When parts are available, we are purchasing multiples which means we are holding far more stock than we did and this is having a negative impact on cash flow.

“The limited availability of new bikes means that many people have released old bikes from sheds where they have laid unused for some time. Managing expectations over costs of repair of these machines has been hard even with the Government Fix Your Bike Voucher. £50 does not go a long way.

“Although many cycle shops have been in a better position over the past 18 months than other high street retailers, we have seen several well-established cycle businesses reduce their number of premises or close down completely in 2021. This has, inevitably, increased demand for our services.

“It is our hope that supply will improve through 2022 but we are aware that this will not happen before the spring. We are hoping to see more footfall as we get used to living with and avoiding the terrible effects of Covid. This will allow us to engage more with our customers, reduce stock levels and improve both cashflow and profit.”

Tip of the iceberg
Blazing Bikes’ Will Chambers says 2021 was a ‘great year’ in terms of sales and growth for the Shropshire store, but with that comes the added pressure of maintaining the level of customer service and aftersales. “There were a lot of early starts and late finishes, but it was great to get lots of new people into cycling and see lots of happy faces in a time that wasn’t that great for the world.

“In terms of sales at the moment we’ve seen challenges with stock availability, but the level of sales enquiries has been brilliant and we look forward to the availability becoming more abundant. Moving forward, I can only see cycling as a whole becoming more popular and the age of the e-bike is definitely in full swing and in my humble opinion we’re only at the tip of the iceberg!”

Pennine Cycles director Sandra Corcoran, based in West Yorkshire, says 2021 is “still a challenging time for us with the supply chain of bikes and parts still being uncertain, so it is not always easy to plan and satisfy customers’ needs. “We’ve seen less footfall of new customers and have been kept busy with our regular customers,” says Corcoran. “We look forward to 2022 and the opportunities it will bring as a family-owned independent bike shop.”

Clear communication
“2021 has been a good year, shop floor sales have been great, workshops have been extremely busy, and we have managed to keep our two stores well stocked,” says South Downs Bikes’ Aaron Creamer. “We have seen a large number of new and returning customers with e-bikes being the main driving force.”

On challenges the shop has faced, Creamer says the workshops have faced big problems with parts; they have had to be imaginative on where they find products and their communication has had to be very clear with customers. “We have had some challenges in finding the correct product for people in some places due to supplier stock levels being unpredictable.

“We have had to be very mindful of ensuring our bike stock holding is correct with a large number of bikes becoming available in certain price points, we have had to make sure we aren’t oversubscribed.” And what about the current state of retail? “We have seen a rise in local footfall since the relaxing of restrictions which has allowed us to reconnect with our local communities in-store and on a social basis with shop rides and events.

“I think cycle retail will remain consistent providing there is product available, and the bike and manufacturers and distributors alike remain as transparent as they have been, which has made the last year infinitely better and  we are extremely grateful for that!”

Increased participation
2021 has been a good year for retail with the strong demand for bikes continuing through the end of the winter and into the spring and summer, says Rutland Cycling ​​CEO Karen Archer and commercial director Andrea Mulqueen. “E-bike sales have continued to accelerate with sales up across all disciplines, [it’s] very encouraging to see this with new customers coming into the market and the still huge potential in this market.”

Demand across parts, clothing and accessories has also been strong, pointing towards the increased participation in cycling seen across the last 18 months, Archer and Mulqueen continue. “Availability within the supply chain continues to be a challenge and from all the signs we see will continue to be so in specific areas for a while yet. Our teams have adapted to this quickly to enable us to continue to offer a great experience both online and in-store with huge help from our key supplier partners.

“We expect the demand for e-bikes, in particular, to continue into next year. We still have a long way to go in terms of ownership compared to some of our European counterparts. With the continued focus on more sustainable travel and investment in infrastructure to support this, the signs are looking positive for growth.”