While bike sales as a whole might be experiencing a downturn, the proliferation of discounted bikes is becoming more noticeable. We’re witnessing a scenario where the lingering effects of the pandemic, alongside issues like overstock, shipping delays and diminished demand for lower-tier bikes have converged. Strangely juxtaposed with these challenges, prices for high-end bike models are still high, and often rising. The cycling retail landscape has become increasingly cluttered with sales events, as major retailers strive to offload excess inventory. Yet, amidst the abundance of bargains, determining a fair price for any bike has become a perplexing task, especially for consumers.
It’s pretty common knowledge that the cycling industry has been through turbulent times recently, with several retailers folding and even major brands grappling to survive, having to find creative ways to overcome the plentiful challenges. As the industry has navigated the post-pandemic lull in bike sales, a surplus of stock has burdened retailers, leading to aggressive price reductions. The prevalence of heavily discounted bikes might seem like this is simply an optimal time to grab a bargain, but it also prompts questions about the sustainability and market norms of the industry as a whole.
> Fancy a bargain this weekend? Star bikes, team bikes and a lot more
“There’s no doubt about it – there’s been some incredible deals available”, says Ian Whittingham, co-founder and director of UK bike retailer Sigma Sports.
“The entire supply chain really isn’t making much margin and then it’s been a great time to buy. There has been quite a lot of inflation in the bike industry as well as through Covid raw material costs increased and shipping costs increased. Bikes went up quite a lot in price.”
Bike sales as a whole have seen a sharp decline since the pandemic pinnacle of 2020. In fact, 2023 saw the worst bicycle sales in the UK since 1985, according to a Bicycle Association report. This followed the already drastic 18 per cent decline in 2022 amidst the post-pandemic downturn.
A total of 1.55 million cycles were sold in 2023 – the lowest the number has ever been since 1985 when the BMX bike bubble burst. In the decades following, bike sales have stabilised, with the UK cycling industry selling an average of 3 million units a year.
Whittingham is quick to agree that times in the industry have not been easy in recent years.
“We all believed our industry was going to be, you know, 10-20% bigger than it was pre COVID, and the reality is obviously that at times in the last few months, it’s dropped below 2019 levels. So it’s been a really tough time, no doubt about it. By far the hardest time anybody’s ever, ever experienced,” he says.
“The whole country believed that we’ve all found a new way of living and working and being fitter. And I think the problem is as rapid as that growth of sales was at the beginning of Covid, the unwind was as dramatic, if not more at the end of it. So obviously it just put the whole industry into a right old pickle because we’d all place the [bigger] orders. Of course, we never expected sales to display at the level of what we experienced during the lockdown period.”
Is this what the bike industry will look like for years to come? Should you put your hard-earned money into a brand-new, discounted bike right now? We’ve talked to industry insiders to find out.
How many bikes are discounted at the moment?
While working on this feature, we’ve had a look at five major UK online bike retailers: Sigma Sports, Tredz, Evans Cycles, Halfords and Wheelbase.
Looking at these retailers’ selection of bikes, on average 48% of their road bikes and hybrid bikes are discounted at the moment. The sales across the different retailers didn’t differ significantly, but it was evident that the prices fluctuated a lot, and bikes were added and removed from the discounted ranges as frequently as a few times a week.
The discounts in the five online retailers surveyed ranged from as little as a couple of percent to 50% off. A similar range is visible on most of the major bike retailers in the UK, and more prominent on the lower and mid-range bikes.
This indicates that margins on sales are very small, and there might still be an oversupply of those bikes.
What has led to the deep discounting?
Talking to the cycling industry retailers, it seemed that most of them had expected sales to be higher than they ended up being, even if they knew the huge boom in 2020 was not going to last. This then put the whole industry into a bit of a mess, because the belief the industry would emerge even a fifth bigger than it was before the pandemic got busted.
> Cycling market downturn worse than expected, says Halfords
“You know, orders were placed by manufacturers and brands, and distributors and us which meant that there’s been a huge oversupply of stock in the market since the end of 2021 really,” Whittingham says.
“Most of our sales were discounted to help pay stock and inventory levels. But we’re in a much much better position going into 2024 than we have been for the last kind of 18 months, and I think actually industry on the whole is in better shape.”
Pockets of oversupplied bikes still exist, though, and most of those seem to be in the entry-level ranges. Whittingham says he predicts those might take years to clear.
While Sigma Sports has, according to Whittingham, been able to stabilise its situation across most ranges, the boom and crash of the last few years have made manufacturers more cautious of repeating the mistakes of the past. Keeping a larger stock of high-end bikes, for example, has become difficult because manufacturers simply don’t produce them in the numbers they used to.
“I think we all got so badly stung by the last 18 months,” he says.
“I think it was right to be prudent… people have cut orders back. We’re still expecting ’24 to not be the easiest year. I think we were all still dealing with coming out of the cost-of-living crisis, and the high interest rates that we’re all having to deal with still. But I think we’re all kind of expecting the normal markets to come back sometime in 2025.”
Aren’t ongoing sales just a good thing?
Though discounted bikes might mean that more people can afford a bike, having constant sales on bikes makes it harder to gauge what a ‘normal’, acceptable price is for a certain bike. At the same time, this is the time when consumers can grab an absolute bargain – especially online – and as Sigma Sport’s Whittingham said: “Now is a great time to buy a bike as a consumer.”
The effect of the slashed pricing is most tangible at bricks-and-mortar bike shops, especially smaller ones. Fluctuating prices and hefty price drops have left customers coming to the shops with unrealistic expectations of the prices, and if the shop cannot match those, they lose the sale.
Sigma Sports has three flagship stores, but 70% of its sales come through online shopping, and in the last couple of years – as has been the case for many others – those sales come from discounted products.
An independent bike shop owner told us: “Of course to them, the prices seem insane as they’re anywhere up to 50% more than what’s become the new norm over the past year. Worse, customers coming in with a budget that would’ve got them something useable, and now I’m like sorry you need to find another 35% on top of that, I’ve got nothing I can sell you for that price.
“I’ve sold through almost all of my stock for bikes last year, heavily discounted of course. Not restocked as demand dropped off, so much so that I didn’t sell a single bike over the Xmas period. I’m being told bikes are effectively a loss leader, make your profits on servicing and P&A [parts and accessories] – make of that what you will, I’m sure in due course it’ll sort itself out, whether actual independents will be around by then though.”
Others echoed this, saying if one brand offers massively discounted stock, it’s hard to sell bikes that are not marked down.
“The only way forward for the small independent is not to invest capital in bike stock to sit on the shop floor,” another shop owner said.
“It is a bit at odds with the ethos of a bike shop, but we need to sell off the catalogue and utilise the importer’s B2B system to get stock only when it’s sold. Don’t do the big buy-ins etc.”
According to the Bicycle Association, the price of bikes increased quite widely, from around 10% to over 40% depending on the discipline and other factors, between 2019 and 2022.
With those increases, a bike priced at £1,000 in 2019 could now cost you £1,400. In addition to Brexit and the long-tail effects of the pandemic, new factors have pushed up average bike prices over the last few years.
Whittingham believes that prices are going to get to the “right level” sooner rather than later when inflation of the prices stop – though the high-end models are likely going to stay affordable only for the very few.
> How much does it cost to get into road cycling now vs 10 years ago?
Whittingham says: “As we’re settling into what 2024 model pricing is going to be, you know, we are seeing some reductions as costs are back under control and inflation is down so, I think it is a great time to buy a bike. I say the right level but then you know, if you look on our site and see a £14,000 S-Works SL 8, but of course, top-end bikes are more expensive than they were pre-pandemic. That bike was probably a £10,000 bike in 2019.”
It’s not all that doom and gloom, though. While some bike shop owners expressed their concerns about the slow movement of bikes, others said they are pleased with the number of mid-range and e-bikes they sell.
Similarly, brands such as Scott were very reassuring in saying they are expecting things will only get better in the coming months.
What actually dictates a bike’s recommended retail price?
With prices being as fluid as they are now, it is somewhat difficult to establish general pricing trends. We can simultaneously say prices are going up, but they’ve also come down – take Canyon’s decision to slash its prices last year, for example.
Bike prices are dictated by a long supply chain and a plethora of variables from currency rates to geopolitics, and in the UK, Brexit has added to the costs in some cases.
David Ward, Giant UK’s product manager, says: “There’re certain key price points that we want to try and enforce. But because of because of the time delay between the concept of the bike and speccing it and what can happen globally, between then and hitting the shop floor we don’t always hit that retail price point.
“Brands such as Giant don’t buy their supplies in British Pounds, but rather in US dollars or euros, depending on the factory. So we sometimes see quite considerable currency fluctuations.
“It’s worth it for the consumers to realise that there are a lot of factors which vary dramatically. And it’s not just a currency that we buy the bike with, it’s the currency that would buy the components – the factory is buying the components in as well, and there’s ocean freight, plus various warehousing costs vary.”
One of the fixed costs for bikes sold in the UK is the import duty. Every mechanical bike entering British soil (and made of less than 70% British parts) is affected by a 14% import duty, and this is something brands cannot affect or find a way around. The tariff is then reversed if the goods are moving from the UK into EU.
Once the bike has been manufactured (most of this takes place in Asia) shipping costs are imposed. With established transport links, the process should be relatively straightforward, but with the current geopolitical situation, even the price of a container isn’t guaranteed.
“We used to know exactly what we were going to pay, then Covid hit and that price went up tenfold,” Ward says.
The brand tries to absorb the cost as much as it can, but there are times when that cost is too much and is then reflected in the recommended retail prices. Since Covid, other types of issues have put an added strain on the containers sailing from Asia to Europe, adding as much as 11 days to the shipping time.
“What’s going on in the Suez Canal at the moment, it is adding approximately $1,000 per container,” says Ward.
“How many bikes we’re getting into a container varies depending on the size of the bike, you know if it’s a kid’s bike versus a big e-trekking bike for example, but we work on an average of about 200 bikes per 40-foot container. That increase at the moment is about $5 per bike, but we haven’t adjusted the prices on the bike loads or something because we’re seeing that as a temporary situation.”
Another aspect affecting the retail prices is of course labour, and the amount of time spent on each bike has increased as the industry has pushed technological advances such as internal cable routing ahead.
An industry expert explains: “For example, if you’ve got a bike with a fully integrated hydraulic system, integrated electronic shifting, everything running through the head tube, that takes roughly twice to three times as long as it does to assemble compared to a bike that has everything external.
“The result of that is that the added labour cost happens right at the beginning of the markup chain. So it leaves the factory, it gets marked up, it goes to a wholesaler, it gets marked up, it goes to a retailer, it gets marked up.”
With increasingly technical bike builds, more and more modern bikes are marketed similarly to our everyday tech items such as smartphones and computers. If the retail price of the newest model isn’t higher than the previous model, the consumer might think it’s not worth buying.
Our industry source continues: “The result that is you now have these fantastically expensive bikes that cost 12 grand, but you’ve got nowhere for them to go. Because relatively few people in the current circumstances, at least in Western Europe, and to a lesser extent in the US have actually got 12 grand kicking around to buy a bike. So again, you’ve got this interesting situation of really, really high retail price.”
Sigma’s Whittingham says that their pricing is dictated by market forces, and tweaked as often as two or three times a week depending on the stock levels.
“We, like the whole industry, have had to bring stock levels down as we came out of the pandemic, and our sales slowed,” he says.
What’s the future like?
It’s safe to say that the long-term sustainability of current pricing trends remains uncertain. While discounted prices may stimulate short-term sales and alleviate the cycling industry’s wider inventory pressures, they could also erode brand value and profitability over time. Not to mention the effect they can have on smaller bike shops.
Manufacturers and retailers alike must balance pricing strategies to maintain competitiveness without compromising long-term profitability – especially on the bricks-and-mortar level, where keeping stock in stores might become a thing of the past, as one industry expert predicts:
“I can see that in 10 years’ time, it will be rather more the norm that multiple brands will either own retailers themselves, or have concept stores, such as Specialized Concept Stores, or they effectively drop bikes into retailers who will be solely a delivery and setup mechanism, and they will lose their stock holding function with the thing,” they told us.
Additionally, the global geopolitical and economic situation is hardly very predictable, especially with 2024 being a year of big elections across the world. Simultaneously, the UK cycling market is still in turmoil after the closure of the dominant online retailer Wiggle/CRC.
One thing that all of the people we spoke to agreed on is that cycling is a very seasonal sport, so some of the sales and thus, pricing, is dictated by the weather. As spring approaches, sales are likely to pick up – and the enthusiast market will want to invest in new equipment despite the challenging economic conditions.
Some industry experts think we will be in this uncertain situation for some time, saying there is still a huge backlog of products to come through into the market, which would indicate that the discounts are here to stay for quite a while longer. This could mean that indeed, now is a great time to buy a bike if you can afford it.
Fantastic items from you, man. I’ve be mindful your stuff prior to and you
are simply extremely fantastic. I really like what you’ve got right here, really like
what you’re stating and the way in which you assert it.
You’re making it enjoyable and you continue to take care
of to stay it smart. I can’t wait to learn much more from you.
That is actually a terrific web site.
Very good post. I am dealing with a few of these issues as well..
What a information of un-ambiguity and preserveness of valuable know-how on the topic of unexpected feelings.
Good – I should definitely pronounce, impressed with your web site. I had no trouble navigating through all the tabs and related information ended up being truly simple to do to access. I recently found what I hoped for before you know it in the least. Quite unusual. Is likely to appreciate it for those who add forums or something, web site theme . a tones way for your customer to communicate. Excellent task.