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Sales Move to the Middle in Minneapolis

Published June 3, 2009

MINNEAPOLIS, MN (BRAIN)—Price points are moving to the middle according to retailers BRAIN visited on its Twin Cities Dealer Tour yesterday. As sales of high- and low-end bikes have slowed as a result of the sputtering economy, retailers are increasingly relying on mid-priced bikes to keep their sales floors humming.

The bike side of the business has outperformed the ski side of the business at Tonka Cycle and Ski, but owner Steve Phyle said the bike business has changed. Phyle said units are down but dollars are up this year at the family-oriented shop in Minnetonka. He attributed the change to the economy, which has driven price-conscious consumers away from IBDs to the mass market. Price increases the past few years have moved entry-level IBD bikes out of the budget shopper’s price point, he said. “Too many bikes are being sold at the mass merchants,” he added.

John Obara, owner of Giant Breakaway store Bikemasters in a second-ring Minneapolis suburb, said he, too, has lost all his low-end sales due to the slumping economy. He said sales between $500 and $1,500 have held up, but the bottom has dropped out of bike sales below the $500 price point. He said customers for that entry-level bike are not even coming in the door. “They’re not shopping,” Obara said.

Retailers also reported seeing fewer sales at the upper end of the price spectrum.

Kevin O’Connor, owner of Gear West Bike & Triathlon, a destination tri shop, said he has seen a downward shift in demand for high-end road bikes above $4,000. He cited declining sales of the Felt DA ($7,000 a pop) from 21 bikes in 2007 to 12 bikes in 2008 to two sold so far this year. He said consumers can get such nice product at such a good price point—such as a carbon fiber road bike for $2,000—that they have no incentive to spend more money when budgets are tight.

“That high-end road bike isn’t selling as it did a couple years ago. The person that spent $5,000 is spending $3,000,” O’Connor said.

—Megan Tompkins

Photo:Bikemasters owner John Obara/photo by Jake Orness

Topics associated with this article: Events

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