After witnessing such heady exuberance within the bike industry during last summer’s “bike boom”, it’s no surprise that few could foresee the current industry downturn, probably brought on by lower gas prices and the deepening recession. Those who were prudent should weather the winter, but it’s going to be a tough road for those dealers who were carried away by the promise of a new golden era of cycling and over-bought for the coming season.
From the New York Times:
After a summer of their dreams, bicycle store owners are facing a grim reality this winter.
Big increases in business this year led some shop owners to think that they were largely insulated from a slowing economy. But the economy has continued to spiral downward, taking bicycle sales and much else with it.
The question now is whether all the bicyclists who appeared last summer will be back next summer.
“This is not like the rest of the recessions we’ve been through,” said Jay Graves, who owns six Bike Gallery stores in Portland, Ore., the first of which his father started in 1974.
Business skyrocketed last summer along with gasoline prices, Mr. Graves said, especially sales of hybrid bikes that can be used for recreation and transportation. So Mr. Graves ordered plenty of cold weather gear for what he believed would be legions of new bike commuters.
“We wished we hadn’t gone in quite as heavy,” Mr. Graves said. “Business is not growing at the rate it was earlier in the year.”
With no end in sight to the economic crisis, the best the industry can hope for is another spike in gas prices like we saw last year. We all know higher gas prices are coming back; the question is whether they come in time to save the small retailers who overcommitted for ’09.