With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1388249
JULY/AUGUST 2021 BCBUSINESS 31 FROM TOP: MARGUS RIGA; RUSS HAY'S THE BICYCLE SHOP ( the informer ) W ith summer upon us, British Co- lumbians keep snatching up bicycles faster than stores can stock them. COVID-19 kicked sales into high gear as people sought a safe outdoor escape, and the boom shows no sign of slowing down. We asked several retail- ers and a top B.C. bike brand how they're coping. S T O C K C O L L A P S E B.C. is home to about 140 bike shops, according to data provider Statista, put- ting the province third after Quebec and Ontario. So it might seem odd that sup- plies remain low, but stores are still feeling the effects of last summer's surge. "We were literally selling bikes out of boxes," says Cec Milligan, owner of The Bike Zone in White Rock. Because manufacturers can't keep up with demand and fill back or- ders, retailers aren't seeing much ben- efit from the buying frenzy. Compared to its usual 100-bike stock, Milligan's store hasn't had more than 10 on the floor at one time for months. W H E E L W O R L D P R O B L E M S The three major B.C. bike brands– Brodie, Norco and Rocky Mountain– all rely on overseas manufacturers. Celebrating its 40th anniversary, Rocky Mountain does R&D, design and prototyping in Vancouver and M AT R I X Riding High For B.C. dealers and brands, the COVID- induced bike boom is a good bad problem by Saphiya Zerrouk builds bikes in Cambodia, China, Taiwan and Vietnam. "The hardest part is, there are very few players for the key parts of a bicycle," says Alex Cogger, chief product officer at the mountain and electric bike specialist. "There are extraordinarily long lead times on components, and there are no other sources, so you just have to get in line and wait." Rocky Mountain has already committed to a full year's worth of inventory for 2023, and its 2022 stock is completely presold to retail- ers. As raw materials costs and overseas exchange rates climb, bike brands have had to follow suit. For just the second time in 40 years, Rocky Mountain raised prices in- season, Cogger says. T H E S U M O F T H E I R P A R T S The two main factories where Canadian bike brands and vendors buy parts are Shimano's Indonesia location and Sram in Taiwan, whose factories shut down for three months at the start of the pandemic. Now there isn't enough steel, rubber and other raw materials to meet demand. "Anything we can get a hold of, we're selling," says Ryan Simpson, a salesperson with Russ Hay's The Bi- cycle Shop in Victoria. "There's bikes sitting [in Asia] right now that are ready to be shipped but they don't have tires or gear changers." G E T U S E D T O I T Pre-loved bikes are scarce, too. Van- couver's Ride On, which sells new and used models, has seen resellers all but vanish. "A lot of people are holding onto their bikes now instead of giving them away, or trying to sell them on their own," says floor man- ager Mike Smith. A T Y O U R S E R V I C E When you're a bike store with no bikes, what do you do? Milligan has expanded his tune-up services. Although stores are selling anything they can get, Simpson says he's had to ration products to prevent bulk purchases. "There are people buying things and selling it online for more than we sell it for, so we're trying to curb that a little bit." C R O S S - C O U N T R Y C Y C L I N G In a move that should cre- ate even more demand for two-wheelers, the federal government has pledged $400 million to build new networks of pathways, bike lanes and trails nationwide. This five-year plan is part of a $14.9-billion investment in public transit. O U T O F O R D E R Simpson says his store won't get its full bike order for 2022. With factories swamped as they scramble to make products for other outdoor activities, too, manufactur- ers estimate that it will take until 2023 for bike supplies to return to pre-pandemic levels. "It's a good bad problem to have. We are sell- ing every single bicycle we make," Rocky Mountain's Cogger says. "It's just a lot of work to make it happen right now. There's no cruise control at all." n SOURCE: FIOR MARKETS 2 0 1 7 U S $ 1 7 B Supercharged Global e-bike market Pedal to the Metal North American bike sales raced ahead during the pandemic UNIT VOLUME FOR 12 MONTHS ENDED IN APRIL E - B I K E S M O U N T A I N B I K E S +240% vs. 2019 +110% vs. 2020 +66% vs. 2019 +45% vs. 2020 ROUGH TERRAIN Rocky Mountain presold its entire 2022 bike stock to retailers; (below) Russ Hay's The Bicycle Shop in Victoria has had to ration products 2 0 2 5 U S $ 2 5 B