Let’s talk numbers

How’s trade? Without up-to-date sales statistics, the British bike trade is in the dark. The Bicycle Association needs to address this shortcoming as a matter of urgency. As luck would have it, there’s a BA meeting this week where the topic of statistics will be discussed.

Past attempts at statistical compilations may have failed – everybody wants to keep their figures to themselves – but that shouldn’t stop the BA trying again. And again. And again.

Is the bike trade going to collectively sell less bikes in 2001 compared to 2000? Will we dip below 2 million units? Your guess is as good as mine.

Government import figures are available but don’t give the full story. It’s up to an organisation such as the Bicycle Association of Great Britain to knock heads together and create an up-to-date statistics service that can be used as a day-to-day business benchmarking tool by everybody in the trade.

As well as raw numbers, it would be extremely helpful to know what colours of bikes were shifting the fastest; what are the market share figures for IBDs, multiples and supermarkets; how big is the market for cycling shoes; how many helmets are sold per year; are road bikes fast catching up to mountain bikes, and are electric bike sales surging ahead, or not?

You get the picture.

In France, the CNPC (the French equivalent to the BA), has carried out a market survey that, if the figures are to be believed, turns existing stats on their head. As reported in BikeEurope (October 2001) instead of accounting for 25-30 percent of bike sales, French IBDs were found to have a 50 percent share.

If it’s true, this would be an important finding because it had been thought French IBDs were being wiped out by supermarket sales of bicycles. Perhaps they’re not. This kind of statistic can have a galvanizing effect on an industry, boosting confidence.

Of course, sometimes you might think it preferable to be left in the dark. When sales are plummeting do you really want to hear such unsavoury news? Well, yes. Burying your head in the sand is the surefire way for sales to carry on plummeting.

Raleigh know this. The recent restructuring of Raleigh’s parent company, and Raleigh UK itself, is aimed at halting a slide.

Raleigh had a very tough first six months of 2001. In Derby Cycle Corporation’s final filing to the US Securities and Exchange Commission on 17th October it was revealed that Raleigh sold 151 000 bikes from January to July 2001, down from 166 000 in the same period the previous year.

“Management believes that particularly bad weather in the first quarter of 2001, weakening economies in several of its markets and the effect of this on consumer confidence led to lower unit sales [for Derby],” said the SEC filing.

“Units sold decreased by 219 thousand units (30%) and 306 thousand units (22%) for the quarter and six months ended July 1, 2001, [for Derby as a whole] as compared with the quarter and six months ended July 2, 2000.”

Many of Raleigh UK’s bikes were sold at a loss:

“Sales in the U.K. in the first quarter of 2001 included 25 thousand units of obsolete models with low promotional prices to generate cash, compared with 12 thousand such units sold in the first quarter of 2000,” said the SEC filing.

The disposal of excess inventories was done at price levels “substantially below cost.”

Derby also had a tough time in America.

According to the SEC filing, in the US sales fell by 25 percent for both the quarter and the six month period, as the market fell, with the key segments for Raleigh (MTB) and Diamond Back (BMX.) down 19 percent and 9 percent respectively, for the quarter, and down 22 percent and 11 percent respectively, for the six months ended July 1, 2001.

And it’s now well known that the Taiwanese bike trade is taking a hammering. Quite apart from the huge losses inflicted on companies such as Merida by the collapse of Schwinn/GT, Taiwanese bike exports are well down.

According to a newsletter emailed by Wheel Giant Inc, 2.9 million bicycles were exported January through July 2001, a 37.9 percent decrease from the 4.7 million bicycles exported during the same period in 2000. Export value slid from $502m in the first half of 2000, to $324m in the same period in 2001, a 35 percent drop.

Sales statistics such as these don’t make for pleasant reading but surely it’s far better to know the truth rather than operate in a marketplace where you have no idea whether sales are holding up or going into freefall? And, as the French study showed, accurate industry-wide reporting can throw up some surprising lifelines.