UK E-Bike Segment Grows Amidst Poor 2015 Sales
LONDON, UK – The bigger picture for bike sales in the UK, as reflected by HMRC (Her Majesty’s Revenue and Customs) figures shows a stable picture despite a decline in 2015 in both units and value imported, with the value per unit staying almost identical. The vast bulk of bikes sold in the UK are imports, but recent figures for exports also show a healthy, stable growth trend.
The number of bikes exported continued upwards but puzzlingly the value of bicycle exports took a downturn. UK bike manufacturing remains dominated by Brompton and Pashley, who both export to dozens of countries, the former announcing a new London-based factory for 2016, nearly twice the size of its current operations. HMRC figures are a very crude tool for analysis. Though the bulk of sales in the UK market are low to mid-priced MTB style bikes, the situation with the higher priced, larger margin models appears to be increasingly fluid.
Halfords and Evans Cycles
Recent years has seen the rise of the typical category of MAMIL or so called ‘middle-aged man in lycra’ in the UK, thanks to Olympic successes and the first time ever British victory at the Tour the France by Bradley Wiggins. This group is typically riding an expensive road machine. This premium price point territory has been fought over by two main contenders, Halfords (through Boardman Bikes) and latterly Evans Cycles (with Hoy Bikes), each boasting a wide range of Olympic star-branded machines.
Online retailers such as Wiggle and Chain Reaction Cycles are also major players. The slight decline in 2015 import figures, showing drops of 2.7% and 3.7% from the 2014 figures, may indicate a slowing of the mini MAMIL-fuelled sales boom. Indeed, Halfords reported a 1% drop in annual cycle sales for 2015, blaming poor summer weather. Halford’s CEO Jill McDonald also commented that discounts from other retailers on high-end bikes had had some effect.
E-bike sales growing by a quarter
Further evidence of struggling retail sales came from UK trade publisher Bikebiz’s 2015 survey of 100 bike retailers. It reported over 40% of those quizzed experienced a 10%-30% drop in annual profits and around 26% found not much change. The survey also found evidence that MAMILs may be migrating to other bike types, with retailers reporting a near even split between road, MTB and commuting/hybrid sales. It also reported the e-bike sector growing by almost a quarter, many retailers reporting dropping sales in all other areas.
It’s not clear where gravel bikes fell within these categories, but they have certainly been a major presence at bikes shows and in many retailers throughout 2015. Bikebiz sounded a note of caution about the multiplicity of genres and subgenres appearing on the UK market in a subsequent opinion piece. In it Executive Editor Carlton Reid suggested that: “a ‘new’ bike categories such as gravel and fat bikes are complicating the retail offering at exactly the wrong time. Excessive market segmentation isn’t a sign of strength, it’s a sign of weakness.”
So looking at the evidence in the round, there seem to be two main areas holding out the promise of sustainable growth for the future; city cycling and e-bikes. Perhaps most positive of all for city cycling is the rise and rise of Halfords city centre chain of shops, Cycle Republic, aimed fairly and squarely at commuters.
Starting with one London store in 2014, the brand had just opened its ninth store at the time of writing and reportedly had plans for another six to nine shops for the end of the 2016-2017 financial year. Emphasising the symbiosis between city / commuting cycling and electric bikes, Cycle Republic say two of their core brands will be high end electric bike manufacturers GoCycle and Haibike. Raleigh, distributors of Haibike and Koga e-bikes in the UK, recently claimed a doubling of year on year e-bike sales and several other e-bike firms reported steady growth for 2015.
Some actually reported a shortage of stock as a limiting factor to growth. “Growth is faster than we expected. It could also be a lot more if we could source the stock. We always sell out and our dealers always want more. KTM have increased production of e-bikes by 20% again for 2017 so we’re hoping we’ll be able to bring even more bikes into the UK market,” said Col Williams of KTM’s UK importer Fli. Williams also echoed what several other UK e-bike suppliers and retailers told Bike Europe; that the most common price point for e-bikes had shifted upwards. “Our key price points are between £1749 (2,255 euro) and £2500 (3,225 euro) recommended retail price but our average sale value is growing year on year,” Williams said.