High Inventory Levels Will Hamper Business at Eurobike
Business isn’t looking all that bright just hours before the opening of the biggest bike show of the year. Eurobike 2011 will be hampered by high inventory levels;
AMSTERDAM, the Netherlands – Business isn’t looking all that bright just hours before the opening of the biggest bike show of the year. Eurobike 2011 will be hampered by high inventory levels; not only at retailers but at every stage in the distribution chain. Next to the wettest summer in history in some of Europe’s major markets, the build-up of stock is also caused by the bike sector’s supply chain that isn’t adapting to the general market trends.
Bike sales in Germany, the Netherlandse and the UK have been badly affected by a summer during which it didn’t stop raining. In Holland bike sales at dealers dropped a dramatic 26% last June. Never before such a big drop in the sale of new bicycles was recorded. Even the trendy electric bikes couldn’t prevent the big drop this time as they too became victim of the rainy and cold weather in June. The sale of this bike category didn’t drop as hard as other models, but was with a decline of 19% still very, very considerable.
At the end of July held press conference on the mid-year results of Accell Group, CEO René Takens said about the consequences of the big drop in June sales: “Our stock levels for complete bikes are high. What remained unsold in June is still in our warehouses. We are keeping bikes in stock these days as dealers are reluctant in ordering as they try to keep their stocks low.”
As in July weather conditions didn’t improve in the Netherlands as well as in a big part of Germany and the UK (three major European markets for bikes), stock levels remained high. It triggered early clearing-actions for MY 2011 models in August.
What also contributed to a clogged distribution channel is the fact that the bike sector’s supply chain isn’t adapting to the general market trend. In 2010 total EU bike sales dropped 3%; bike imports from Asia however increased by 10%.
The not accurate functioning supply chain is turning into a mounting predicament for the bike sector in Europe. In particular because consumer demand is becoming ever more difficult to predict. This caused major shifts in types of bikes sold in 2010. Next to that retailers are more cautious in placing advance orders and building up stocks in the winter period.