● Measuring the UK bicycles market is surprisingly difficult due to a number of factors. Imports fluctuate according to retailer stock levels, and volume sales are difficult to grow due to the lifespan of the typical bicycle and the prevalence of second-hand bikes in the marketplace.
● Sales values are subject to deflation in the general leisure market as well as the current inflationary impact of weak sterling on exchange rates.
● Taking these trends into account, Mintel has used Coliped’s market estimates and trade feedback to estimate 2010 values at £698 million – eight per cent growth since 2008 – and unit sales at 3.6 million, on a par with 2008 figures and a slight decline on 2009.
● The adult to children’s bicycle sales ratio is approximately 72:28, however this excludes children’s bicycles under 635 mm in saddle height.
● Growth sectors have been road bicycles, due to the popularity of sportives, and traditional/hybrid bicycles, due to commuters and first-time buyers.
Interest and participation at record levels
● The level of interest in cycling has been unprecedented, reflected in highest-ever membership statistics for key cycling organisations such as CTC and British Cycling. Hundreds of cycling events took place nationwide during 2009, and 2010 highlights include the Mayor of London’s Skyride which is set to surpass 2009’s turnout.
● The core consumer dynamics are signalling that cycling is on the increase; more consumers are cycling (regularly and occasionally), more consumers are watching and Googling cycling on the internet. Sport England’s ongoing tracking of participation (Active People Survey) reveals an encouraging 4.46 per cent of the population now cycle at least once weekly – up from 4.26 per cent in 2008/09.
● Two thirds of adults are non-cyclists; a combination of lapsed, unmotivated and disinterested consumers. The increase in cyclists on the road should help motivate others, and anecdotal evidence suggests that the more cyclists there are, the safer the roads become.
● Motivations for cycling are primarily fitness and fun. However, commuting has become increasingly popular and even aspirational as those who don’t currently cycle to work are thinking it’s a good idea. Other incentives to cycle include easing congestion, saving money, and cycling when on holiday.
● Men are the greatest cycling enthusiasts; women seem to identify with mainly the ‘green’ aspect, preferring to exercise indoors as part of a group or in front of the TV. While cycling as a family is the main motivation for the general public, road safety is still a major barrier to take-up. The National Cycle Network is expanding the number of cyclists quicker than it is establishing the infrastructure of its routes.
Innovation gets technical – in models, parts and accessories
● Each year, new models are introduced to stimulate the interest of the cycling community. Due to a stock shortage in 2009, some 2010 models were brought forward. Within the fragmented supply chain there has been some consolidation, with brands such as Raleigh, Giant and Specialized creating own-branded stores where they can raise their profile. Some are also starting to manufacture and brand their own components.
● Electric bikes, or e-bikes as they are commonly known, may be snubbed by the cycle-snobs but they really are generating excitement in the industry. There has been considerable investment by brands in making them more lightweight, compact, and aesthetically-pleasing. Retailers have been making sure they have key brands in stock ready for consumers to catch on, and specialist advisors ready with purchase and repair solutions.
Routes to market
● Independent cycle retailers have survived the recession for the most part well. Cash flow is one of the biggest challenges as in other industries, although extra revenue from parts and accessories has been an unexpected boost. While increased sales of bikes have begun to filter through in the last 12-18 months, the high demand for parts and servicing reflects the volume of second-hand bikes which are in use.
● Halfords’ overall portfolio has benefited from bicycles’ growing popularity, and investments in above-the-line advertising and children’s and premium range development have paid off.
● The Cycle to Work scheme has been a huge incentive for consumers to start cycling, and furthermore encourage consumers to spend up to a third more on their purchase. Retail finance schemes have proved valuable in keeping the wheels of commerce turning during the recessionary period.
● The forecast for the cycling market is as good as it gets in the current economic downturn, but its fortunes are ultimately determined by certain factors it cannot control; namely the weather, currency volatility (which impacts on prices) and government funding. However the investments in infrastructure already made by public and private bodies should make cycling a sustainable market for the foreseeable future.
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