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amey
JamesQGM
Glws
I work in the Industry and have done for 5 years, currently working in a London Bike shop as an assistant manager - Here's my take.
We definitely hit peak of the bell curve of trade a few years ago and now are coming down the other side - We had an explosion of growth with Wiggins, Olympic fever etc and things were good, lots of new shops opening etc.
The trajectory was starting to show signs of already heading downward before brexit, then brexit hit consumer confidence and put the cost of bikes up and the specs lower as 99% of bikes in the country are imported from the Far East and lower value of the pound hit us hard.
Consumer confidence and appetite for big purchases is at an all time low, I remember when people would happily walk in and chuck down 5/6 Grand cash for a big bike purchase, that as dried up now, and a lot more on cyclescheme and finance which eats into margins (bike shops will lose 10% margin on these purchases) Bear in mind the usual margin on a bike sale is 40%.
Plus the farcical review of business rates hasn't helped, general increases in London rents, and the atrocious winter we've just had.
Obviously increasing competition from online has made it difficult aswell, Canyon et al are smashing out some great bikes at good prices and if you know what you are looking for and happy with the risk on sizing etc then It makes sense to go online.
I do see a future for smaller, workshop focused shops, Which have low rents, good margins on labour, and can source large quantity of parts and cheap prices. From our point of view the workshop side of things is doing well.
I also think larger places that offer more service, such as fitness classes, coaching, bike fitting etc, stand a better chance, but we are seeing decreased demand for things such as bike fitting in line with decreasing bike sales.
So I'm guessing we'll see this continue over the next year or so, whoever lasts the longest will pick up trade from the other closed shops and it will start to stabilise.
But yeah the boom is definitely over.