Comment: Is chain growth good for the trade?

Carlton Reid weighs up the pros and cons of the expansion of the chain store
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In the 1960s, mathematician Paul Cooper theorised that a chute cut through the Earth, evacuated of its air, would allow for a vacuum-assisted drop-down journey from one side of the planet to the other. The first half of the plummet would consist of fast free-fall; the second half would consist of an exactly equal deceleration. The time for such a journey? 42 minutes.
42 is a peculiar number that often crops up in mathematics and literature. That’s why it was chosen as the Answer to the Ultimate Question of Life, the Universe, and Everything in The Hitchhiker’s Guide to the Galaxy.

It is also now a stand-out number in the bike trade. Evans Cycles has reached the magical number of 42 stores. This isn’t perhaps as much of a retail landmark as 50 stores but it’s a wake-up call nonetheless. 42 stores. Yoiks, that’s quite some chain.

This concentration of IBD business in one chain frightens and emboldens rivals in equal measure. Reaching 42 stores is frightening for rivals because the economies of scale such a business can bring to bear are significant. Evans can now launch or resurrect brands with almost guaranteed success: Jamis is the latest to get the Evans touch.

But the growth of Evans doesn’t scare every rival. Many revel in the chain’s growth, gleefully pointing out that you don’t get true gourmet coffee in Starbucks.

For sure, Evans stores are corporate stores, but many consumers couldn’t give a fig about this, they just want a local bike store.

While a quality, independent espresso bar isn’t available on every street corner, it’s comforting to know you can get a Starbuckian caffeine kick on pretty much every corner, and, really, Starbucks coffee is a quantum leap better than coffee used to be. The spread and spread of Starbucks didn’t reduce the demand for coffee from other outlets. Quite the opposite. A strong player can bring the rest of the market up with it.

Likewise with Evans. From a whole market perspective, it’s very much a force for good. A large chain proves there’s money to be made in the bike trade. Evans mostly opens stores in new locations, it doesn’t re-brand existing IBDs. This, also, is good, stimulating trade in new urban pockets.

Naturally, a large and expanding chain has might on its side and, unchecked, can steam-roller through a market. Evans is dominant but not yet domineering: it has lots of atomised competition. Ten years ago there were a touch over 2,000 IBDs in the UK. Today there are perhaps a touch over 2,000 IBDs in the UK. For every IBD that closes, another opens. This is a healthy market. There’s space for ambitious single site IBDs and space, too, for ambitious multi-store chains. There’s also space for internet giants such as Wiggle and Chain Reaction. The dire warnings of a trade collapsing in on itself have not come true. Bike trade stats are rarer than hens’ teeth but it’s safe to assume we operate in an expanding market.

Happy Christmas!

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