How did IBDs fare in 2020?

Bike retailers have seen a rise in demand this year, leading to surging sales and stock shortages. But what can we expect as we head into 2021? Rebecca Morley investigates

The retail environment has had to adapt to consumers’ changing shopping habits for some time, with a rise in online purchasing leaving many brick and mortar stores struggling to compete. And COVID-19 has made this even worse, forcing non-essential stores to close temporarily during lockdown periods with some even going into administration.

Bike shops, on the other hand, have seen a rise in demand as the nation embraced active travel. But this led to stock shortages across the industry, creating challenges not many could have anticipated at the start of the year.

“COVID-19 has thrown a multitude of changes at us,” says Mat from John Wood’s Cycle Repair Centre. “Different elements of the industry are changing almost on a daily basis. We have made alterations to deal with the change in footfall along with an extremely challenging supply chain. “Luckily most of our suppliers, like us, have been incredibly forward thinking and adapted operations to enable us to make the most of this strange time. There is a lot of speculation about 2021 but the one sure thing now is that no one knows what it will bring.”

Rides on Air Cycles, a finalist for Best Independent Bike Dealer Award at this year’s BikeBiz Awards, saw a surge in sales in late 2019, culminating in an “excellent” December followed by a strong January and February, says Paul Lynn. “We felt confident 2020 was going to be a good year – COVID-19 came along and changed what we felt would be a good year to a fantastic year in terms of sales.

“But it brought with it a lot of concern and changes within the workplace to ensure we complied for our customer and employee safety to follow the rules. High volume sales and long queues outside the shop were something not seen before.

“Changes in our working practices, from each person having their own phone to cleaning everything regularly, to managing high volume sales and repairs and planning collection and deliveries, were required. Success in sales brought along supply issues and challenges to find solutions and resulted in us increasing sales by over 100%.

“Planning for 2021 is well in place with orders deposited until September 2021, but we can see the challenges with supply will be with us throughout next year. Success or failure is in the individual owner’s hands. Plan and stock well and you will achieve and have a prosperous year or your business will fail. Every retailer should be going into 2021 financially very strong which can only improve the profile and image of cycling, but we still have to work hard and stay safe for our staff and customers which will also continue during 2021.”

Supply challenges
Chris Reilly from Berkshire Cycles, also a finalist for Best Independent Bike Dealer at the BikeBiz Awards, describes 2020 as a “crazy year”, fearing it wouldn’t be allowed to open back in March, and upon hearing it could, decided to close two of its stores and just keep Crowthorne open with four members of staff.

“Over the next 23 weeks, we basically took over two years turnover,” says Reilly. “With between 20-30 people queuing every minute of the day, it did not relent. We were working 7am-11pm, six days a week, trying to keep on top of things and see to all our customers’ needs. Sadly, all good things must come to an end, and now the lack of stock is making things difficult. Our suppliers are doing their best to help.

“During the height of lockdown, we emptied our Reading store of around 480 bikes, and this only lasted 48 hours! It wasn’t just Berkshire Cycles which had a fantastic time.
All of the other stores have been flat out.

“With the number of bikes sold during 2020, I can’t really see the same growth for 2021. And sadly for those that will be losing their jobs, this will force people into a position where they may look to sell their bikes or personal possessions to keep cash flowing and survive. Fingers crossed that everyone stays safe and well, and my predictions are wrong.”

Unsurprisingly, Primera Sports’ MD Bill Temple describes 2020 as a “very strange year”, having seen record bike sales with new cyclists getting on board, with a good percentage still hooked during the start of winter. “We feel extremely lucky that some of our brands have managed to keep bikes coming through, with some of the smaller brands providing good numbers which have more than just filled gaps, but have now become major brands for us.

“I feel confident that 2021 will be another strong year as people jump off public transport and on to bikes! Challenges ahead will be bike supply, but having a few great brands makes sure we always have something turning up. I am personally very impressed with some of our suppliers who have really pulled things out of the hat for us. Bikes shop owners are a unique bunch who are very good at changing direction at the drop of a hat while remaining positive.”

The biggest challenge faced by Arragon’s Cycle Centre, according to owner Sarah Graham, is continuity of supply. “We increased our forward order commitment in an attempt to ensure ongoing supply, but it is a bit of a crystal ball. One thing is for sure, this is completely out of our control so we need to adapt as best we can to meet the challenges that have been thrust upon us.

“This whole thing has made us appreciate even more the value of community and although we have always supported our local economy, we will take greater steps to do so in order for our town to continue to survive.”

Tsunami of pressures
John Ainscough from Blazing Saddles says that in 26 years of business, the store has weathered a lot but has never experienced the “tsunami of pressures” it is currently grappling with. “Current events require us to adapt and to keep on adapting and this is something that small businesses are well placed to do. One thing I have definitely learned is that we are all capable of much more than we think, so it’s best just to get on with the job.

“When we went into the first lockdown, the stress was intense and that was a dark time,” continues Ainscough. “We didn’t know then that the Government would step up with the furlough scheme and that people would decide to embrace cycling in the way that they have. These two events were game changers. 

“We had had a slow two years previously and we were not sure whether the market could support small shops like us in the light of e-commerce trends. It’s hard to say, but our business has benefitted through this time and it has demonstrated the usefulness and need for local service providers such as ours. Obviously we hope that the demand stays and, most importantly, that the industry can catch up with it!

“With regards to the future, one thing that concerns us is the worrying trend for distributors to go direct to consumer which erodes the relationship between the bike shop and the customer. There needs to be a number of cogs in the distribution wheel, and if profit and market forces take total precedence then we will all be the lesser for it.

“My hunch is that there will be a self-righting mechanism to that trend, but some of us might not still be around to pick up afterwards. It’s tough in the cycle trade and the best-case scenario is to work together rather than against one another.”

Jerry Arron from Mud Dock also highlights the move of some distributors in going direct. “With all bicycle retailers essentially facing the same issues, I think the biggest casualty has been the increasing fragility in the relationship with their distributors. They, the distributors, have moved their business models more directly to market. This was especially prevalent at the beginning of the pandemic when a number of high profile bike suppliers announced this as their way forward. There will be no going back.

“With greater profits to be made by cutting out the middleman and at a time of significant product shortages, why would they prioritise supply to their historic dealer base when they can simply supply direct via mail or through their own stores and immediately take the extra cash? The inevitable result is a breakdown in trust and increased suspicion that IBDs are not getting the full story with regard to stock shortages.

“I suspect that this will continue whilst the market remains bullish into 2021, and with a vaccine on the horizon and a sense of a return to norm those bridges will need a little rebuilding.”