The full NBDA report for January can be downloaded at http://www.bikebiz.co.uk/.../RDC-Analysis-January-03.pdf
It's a meaty report, the fattest for some months and, as well as offering the latest market stats, provides a useful digest of the latest newspaper and website economic forecasts.
The US-specific report starts with the depressing news that the NBDA RDC Same-Store Panel Index is down for the tenth consecutive month. Units were down 21-5 percent, a big drop from the two previous months, says report author Jay Townley, an industry consultant.
The Same-Store Panel reported new bicycle retail revenue for the nineteen brands tracked down 23.4 percent, the largest decline in retail dollars reported over the last ten months.
The largest decline previously reported was in May when the panel reported a 16-5 percent decline.
The NBDA report then analysed sales of 'previous year bicycle models'. These have been "a significant feature of the [IBD] channel merchandise mix for over a decade."
In 2001, previous year models represented 22 percent of new bicycle units and 23 percent of retail dollars sold.
In 2002, previous year models represented 21 percent of new bicycle units and 24 percent of retail dollars sold.
Of course, in 2002 bicycle brands introduced 2003 models early, with retail sell through reported in May, during the high selling season.
Because of this, the RDC 2002 Year-End-Survey indicates that only 20.5 percent of IBDs "plan to add to their inventory in 2003."
Of those who don't plan to add inventory, just under half report they will try to reduce inventory.
"If the RDC panel retailers represent the majority of specialty bicycle retailers in the country - open-to-buy will be down and inventory levels will be flat to down. Previous year models - 2002 and older will continue as a significant feature of the 2003 retail sales mix. Continuation of the early introductions of 2004 models will be dependent on retail inventory, open-to-buy and retail sell through," said Townley.
And in a wake-up call to the industry - echoed by UK trade commentators - Townley said: "Attempting to force the market by early model introductions in the face retailer reluctance to add to inventory could be contra-productive."
The report's 'top ranked retail dollar producing product categories' in January, expressed as a percentage of retail dollars, were:
MTB, Front Suspension: 27.57 percent
Road/700c: 22.65 percent
Comfort: 14.64 percent
Mountain, Full Suspension: 11.29 percent
Hybrid/Cross: 6.32 percent
To see the shifts in product category mix download the PDF above.
The NBDA report also carries a raft of useful economic indicators from a variety of US newspapers and websites.
'Retail Sales Hurt by War, Weather, Worry' is the headline from a March 4th, 2003 Reuters article by Paul Thornasch, who reports that: "When Chrysler's sales chief this week brought up the 'three W's'- weather, war and worry - he was assigning blame for falling sales in the U.S. auto industry" but he "might as well have been discussing the retail market."
The article points out that: "Sales at major US chain stores fell 2 percent in the four weeks ended March 1, compared with the previous month," and quotes several retail reporting services that agree that this drop in retail activity "underscores the effect severe snow storms, fears of a possible war with Iraq and concerns about the economy had on sales at discount stores, department stores and other retailers last month."
Sounding a bright note for IBDs and other specialist retailers, 'Specialty Stores: The Right Mix is the Key" was an article on http://www.KiplingerForecasts.com by Sally Martin O'Briant on March 14th last year.
Townley writes that "while this article is about a year old, it still is very timely in reporting that: "Specialty stores, which offer harried consumers a tightly focused product line and an enticing shopping atmosphere, will continue to lure customers away from department stores and drugstores. After a decade of frenzied consumption that peaked in 2000, shoppers increasingly will turn to stores that will save them time, with carefully chosen and displayed merchandise."
"Unlike mass merchandisers Wal-Mart and Target, whose major appeal is low prices, specialty stores will draw eustomers by offering them amenities such as trendy cappuccino bars and child play centers, which can make shopping trips fun and relaxing."
And picking up on the propensity for the big to get bigger, Townley draw comfort from a February 13th Denver Post article by Kelly Pate, headlined
"Thriving culture of cyclists fuels larger bike shops".
This is a story that reports: "Broad selection, amenities and all-consuming bike culture is the thrust of two new giant bike shops opening this spring. Bicycle Village in Aurora and BikeSource in Highlands Ranch - signaling what could be a shift in the way bikes are sold in Colorado.---
According to the Denver Post "BikeSource will grow six fold on April 1 when it moves into a 26,000-square-foot building" and Ken Gart, owner of Bicycle Village is investing $1 million in the new Bicycle Village that opens March 15.
"Clearly, the owners of BikeSource and Bicycle Village have the courage of their conviction about the future of specialty bicycle retailing in the U.S. today, and tomorrow," concluded Townley.
But he also sounds a warning:
"The economy is fragile, and teetering between slow growth and recession.
Accordingly businesses of all sizes and types need to adjust or develop their business plans to take war, weather and worry into consideration, and develop strategies and tactics that insure the stability of the business and create opportunities for growth going forward.
"Optimism without a plan is highly dangerous. The balancing act between the uncertainties of war, weather and worry is what I call managed optimism. There is a lot of merit to the power of positive thinking and not getting caught up in the negative talk and pessimism. However, optimism without a plan and without a clear understanding of the facts and reality of any situation is highly dangerous.
"Managed optimism, on the other hand, uses the facts and reality of the situation to craft a plan that takes advantage of and creates opportunities. At a meeting several years ago an executive in the bicycle industry spoke of "a crisis of opportunity" and that is what we now have before us. We can't change the pending crisis, but we can analyze it carefully and take full advantage of every opportunity that it presents, and craft new opportunities where possible."
"It is time for the specialty bicycle retail channel of trade to return to a program of promoting bicycle shops as the preferred portals to join and invest in the cycling lifestyle and culture in the US. Weak sales is the biggest single problem facing every business in the U.S., including specialty bicycle retailers. The industry needs to take action to quickly take some of the funds it now has in the bank for lobbying and advocacy and redirect this money to a coordinated promotional and PR campaign to spotlight bicycle shops as the bicycle experts in the community, and the place to find out about and join the cycling lifestyle and culture in the US
"It's about the opportunity to create a new perception of a thriving culture of cyclists. While we need to quickly promote bicycle shops as the places to find out about and join the cycling lifestyle and culture - we also need to reinvent the lifestyle and culture to greatly broaden it definition and make if much more. user friendly and inclusive.
"We already have the adult cycling enthusiasts as bicycle shop regulars, and the current lifestyle and culture is very much the enthusiast and aggressive athletic lifestyle and culture. To take advantage of both current trends and market potential we need to retool and reinvent the cycling lifestyle to reach out to moving ups and the richest potential of all, casual riders. We have the very real opportunity to create a new and broad based perception of a thriving culture of cyclists that is friendly, inclusive and represents a healthy, happy and fun lifestyle for everyone in the US."