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<b>France 2006:</b> Big Changes

Sales & Trends

PARIS, France – Big changes are taking place in the French bike market. Supermarkets are losing interest in the sale of bicycles, while domestic producers like Cycleurope or Mercier that used to deliver the low priced supermarket bikes are turning to other distribution channels and in particular to IBDs. In 2006 the big winners in […]

<b>France 2006:</b> Big Changes

PARIS, France – Big changes are taking place in the French bike market. Supermarkets are losing interest in the sale of bicycles, while domestic producers like Cycleurope or Mercier that used to deliver the low priced supermarket bikes are turning to other distribution channels and in particular to IBDs. In 2006 the big winners in this distribution battle were the sporting goods retail chains, especially Decathlon.

The Bike Market in France (in units)

 
2005
2006
Total sales
3,760,200
3,527,700
Production
1,660,000
1,290,000
Import
2,500,000
2,200,000
Export
466,000
228,000

Source: Tous à Vélo, Conseil National des Professions du Cycle

Bike sales in France dropped 6.2% in 2006. 3,527,700 bicycles were sold compared to 3,760,200 in 2005. According to the French industry association Tous à Vélo, last year’s sales in terms of value dropped 4% to a total of € 828.4 million. Despite the 6% drop in numbers and 4% in terms of Euros, 2006 was still the second best year in the period since 2001.

Production drop

One thing is sure when looking at the key figures for the French bike market in 2006; the year saw a dramatic fall in the number of bikes produced. Only 1,290,000 were assembled: 22.3% down on 2005, when 1,660,000 units were produced.

According to French industry association Tous à Vélo, Conseil National des Professions du Cycle, and its secretary-general Didier Huré, the huge production drop represented a correction to an unusually buoyant previous year. In 2005, deliveries boomed by over 21%, with bike sales growing by 7%. “In 2006 stock that was left over from the year before was absorbed.”

As well as stock correction, the production drop is also surely related to the fact that the biggest French producers have stopped or are in the process of stopping their business with supermarkets.

Accell Group Stopped Supermarket Business

In September 2006 the Accell Group announced that their French subsidiary Cycles Mercier was to stop its supermarket business due to, as an Accell Group spokesman put it, ‘price madness’ in France.

A drop in orders from supermarket companies is also said to have caused major financial problems at Cycleurope, the biggest French bike producer, which operates two production facilities in France with an estimated annual production of 800,000 bicycles. The company is to cut 140 jobs at its facility in Romilly-Sur-Seine and is selling its Machecoul plant to the local government under a leaseback scheme.

Decathlon

However, in the years to come, bike production in France is expected to grow substantially, thanks to developments at Decathlon. The sporting goods giant recently announced it would take bike production into its own hands, starting in 2009 with production in Lille. Despite Decathlon’s announcement that ‘production will take place on a limited scale’, rumours are going around that that production in Lille is to grow to one million units per year.

Looking at the huge site in the town in the North of France where Decathlon’s bike production will be based, that one million unit figure will be no problem at all. In 2006 Decathlon is said to have sold 2.1 million bikes in total through its stores in 13 countries. In France the company sold 1.4 million bikes, making it by far the biggest bike retailer in France with a market share of over 35%.

Biggest Distribution Channel

According to Tous à Vélo, sporting goods retail chains like Decathlon and Go Sport sold a total of 1.7 million bikes in 2006 and are the biggest distribution channel with a 48% share of total bike sales. Supermarkets and other mass merchants lost share in bike sales in 2006 to the sporting goods chains. They sold slightly over one million bikes and controlled 28% of the total sales of bicycles.

Dealers in France sold 822,000 units, representing a 24% share of the market (same as in 2005). Half of those 822,000 bikes were sold through dealers that are organized in one of the French retail organizations.

In terms of turnover, dealers were again the number one distribution channel in 2006. They managed to secure a 52% share of the turnover in bike sales, which stood at 828.1 million euro (4.5% down on the 867.2 million euro turnover in 2005). Including P&A, total sales of bike products in France in 2006 stood at 1,353.2 million euro; down 3.2% on the previous year.

Categories

More than half of the 3.5 million bikes sold in France last year were MTBs (adults 31.5% share, and 20 + 24 inch share: 20%). The second biggest bike category was Junior bikes (non MTBs) with 580,000 units sold (16.5% share) while Trekking and Hybrids took third place with about half a million units sold (14%).

Remarkably, only 170,000 City bikes were sold (5%); even less than the 185,000 road racers (5%). About 6,000 pedelecs and E-Bikes were sold; a big jump compared to the 3,900 units in 2005. The average retail price of bikes sold in France last year was 235 euro; up 2% on the 231 euro the year before.

Imports Down

Along with the fall in bicycle production, imports and exports also dropped. Imports went down 12% from about 2.5 million to 2.2 million units while the number of exported bikes more than halved (down 51%) from 466,000 to 228,000 units.

French bicycle sales in 2007, like those in other EU countries, are performing much better compared to 2006. The first quarter of 2007 showed a 16.5% increase in sales over the same period last year.

Bike Sales per Category (in units)

 
2005
2006
26” MTB
1,300,000
1,102,100
20” – 24” MTB
732,400
711,000
Child Bikes (non-MTB)
587,000
582,600
Trekking, Hybrids
498,000
499,500
Road Race
186,000
184,800
City Bikes
173,000
171,600
BMX, Bi-Cross
148,500
133,600
Toy bikes
133,300
142,500

Source: Tous à Vélo, Conseil National des Professions du Cycle

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