The average bike shop today is bigger than in the past, both in dollar volume and physical size, according to a new retail study from the NBDA conducted early this year.
The Specialty Bicycle Retail Study, published annually since 2004, reports average store sales of $997,761 in 2013, average store size of 5,562 square feet, and $179 in revenue per square foot, all record highs.
While these numbers are incrementally higher than the previous year, comparing the latest study to the one done a decade ago illustrates some of the striking changes in the bicycle retail marketplace. In the 2004 report, the average store average dollar volume was just $540,000, average store size was 4,822 square feet, and the average store produced just $111 in sales per square foot.
(Note: for purposes of the study, a bike shop is defined as a business with a physical location with at least 50% of their sales being cycling-related, selling bicycles, bicycle parts and accessories, and having a service department.)
Clearly, the retail marketplace has changed, and mostly in good ways. The bad news? There are a lot fewer stores to enjoy the ride. There were 4,704 stores in 2004. In 2014, the number of storefronts dipped below 4,000 for the first time to a modern-era low of 3,950, according to the Gluskin Townley Group.
The specialty industry is moving more dollars through those fewer storefronts though, with an estimated $1.3 billion of sales in 2004, compared to about $2 billion in 2013.
The latest survey confirmed that 2013 was an off year for the bike industry overall. Weather was the main culprit, according to the retailers. This tracks well with previously-released data that bicycle sales were off by 12 percent, and adult participation down to 35.6 million cyclists age 7 and older who rode six or more days in the year.
Much of the big-picture competitive landscape has remained the same in the last 10 years. According to the latest market overview, independent dealers have more than held their own versus mass merchants, sporting goods stores and others who sell bike products.
In 2003, mass merchants sold 74.5 percent of the bicycles in the United States. In 2013 they held steady at 74 percent. In 2003, independent dealers sold 16.5 percent of the new bicycle units, and in 2013 increased that share to 17.5 percent. Declines were cited for chain sporting goods stores and miscellaneous other retailers.
In terms of dollars, independent retailers have continued to command most of the dollar share from other retailers, being responsible for 58 percent of the bicycle dollars last year, compared to mass merchants at 36.9 percent.
Internet sales were not broken out as a separate category, but dealers reported Internet retailers represent their biggest competitive challenge.
Some other highlights, comparing 2013 with 2003:
- 88% of stores were single-store operations in 2003. 88.1% of stores were single-store operations in 2013.
- New bicycles represented 39.2 of the average store’s sales in 2003. The number moved a little higher to 40.5% in 2013, while both repair and “other outdoor” equipment fell.
- The average selling price of a new bicycle was way up for specialty bicycle retailers to $695, 42% higher than in 2003’s average of $400 (not adjusted for inflation).
- The types of bicycles being sold are quite a bit different. The share for mountain bikes went from a 32.9% share to 24.3%, comfort was down from 15.5% to 12.3%, and youth bikes crushingly down from 24% to just 10% of the IBD market.
- Growth came from road bikes taking a 21.9% share (from 10.8% in 2003), and hybrids almost doubling from 12.5% in 2003 to 23.2% in 2013.
What about the future?
In this year's survey optimism was in the air, with a convincing 62 percent of dealers expecting an improved year in 2014. This is the exact same percentage of optimists as 10 years ago. They were right then, and the industry enjoyed slight growth the following year. Will they be right in 2014? The prediction from here: optimists win again. 2014 bicycle sales will be up by 8 percent. Adult cycling participation will rebound. It's not exactly a "bike boom," but we’ll be OK.