Bike retailers are beating the recession as people try to get healthy and petrol costs soar. And the success isn’t limited to the big names
Why are we talking about it now?
Last week Retail Week revealed that bikes and accessories etailer Chain Reaction Cycles was exploring options to raise finance to fund expansion. Rival Wiggle said last month that it has hired advisory firm Rothschild to explore its strategic options, which could result in a sale or float valuing it at £200m.
How big is the market?
This year the bikes and related accessories market is expected to grow 3% to £823m, according to research firm Verdict. This compares with the £799m size of the market last year. The market has seen steady growth through the recession, according to Verdict consulting director Neil Saunders, although growth dipped to 0.6% in 2009 as consumer spending nosedived.
Saunders expects the sector to continue to grow at about 3%, but said growth might slow to 2% in about five years, due to penetration of bike ownership in the UK.
Who are the main players?
Halfords claims it has the largest share of the bikes market, reporting that it sells one in every three bikes in the UK, while others, including 42-store retailer Evans Cycles, are doing well too.
Etail specialists are also expanding their share. For example Wiggle has posted profit and sales surges in recent years.
Argos has a strong offer and supermarkets have also got in on the action at the less premium end of the market. Even with stiff competition from the multiples, independent bike shops are thriving. According to Saunders: “It’s one of the areas where indies still do really well.”
Outdoors retailers such as Go Outdoors also have their own offers. “There is good growth still to come, but the market has become a little crowded,” says Saunders.
Why is the market so robust?
Cycling has grown in popularity in recent years. The pursuit fits in with the growing health agenda in the UK and has also become more accessible due to Cycle to Work schemes. Saunders believes the market has benefited from sporting successes, as well as the London bike rental scheme, which has given cycling greater prominence. It is also a cheap way of getting around in the face of rising transport costs.
Saunders says that the market also benefits from sales in accessories, as cyclists frequently replace and improve elements of their bikes.