Ah, the recession. It seems such a long time ago now. Those heady days of seeing customers queuing in the street to withdraw their cash from Northern Rock. The bank bail-outs, the collapse of easy credit and the sub-prime mortgage market – I never did work out what that was. Did you?
That might have all happened back in 2008, but the reality is that the effects are now really starting to bite. Public sector jobs have been slashed, the property market has rarely looked so overpriced or stagnant and there’s no real indication when the economy will turn the corner and consumer purse strings will be loose again. Worryingly Ernst & Young think retailers are set to contend with a ten year long spending squeeze.
And on that cheery note, how exactly is the bike trade faring in this tough trading environment?
Back at the start of those recessionary days in 2008/2009 orders for new stocks of bikes certainly appeared more cautious, leading to subsequent shortages in road bikes, particularly. But the trade was also characterised by a positive atmosphere of defiance, that the bike industry would even boom during the credit crunch.
Has that prediction borne fruit? Arguably, there have been signs that the bike market has lost its invulnerability to the poor economic climate recently. Halfords suffered in sales at the end of 2010 – dropping 16 per cent in the quarter leading to Christmas – and independent sales were seemingly severly dented in the run-up to year end too. Was that just due to the bad weather? And the liquidation of Race Face at the start of this year hardly backed the image of a thriving industry. Of course, without official bike sale stats from the entire UK bike market it’s a case of relying on tit bits of information and anecdotal evidence (I promised myself I wouldn’t mention that again. I failed).
Since then Halfords has posted a rise in sales, while IBDs are having a rollercoaster of a time, according to ActSmart stats. Significant firms like Shimano, Dorel and Accell are performing well this year and the word on the street in the UK is that while bike sales are very tough, P&A sales are positively booming. And the consistent message we hear is that workshop business is surging like never before.
With factors like those eye watering petrol prices encouraging folk onto bikes, plus the Olympics and plenty more reasons to be positive, the bike market has much going for it, even at a time like this. But invulnerable to the credit crunch? Only time will tell.