High gas prices and falling incomes have kept revenue growth flat.
Los Angeles, CA (PRWEB) October 02, 2013
Over the past five years, Bicycle Dealership and Repair industry operators tried to stay ahead of the pack as the recession took its toll on many retail industries. Faced with low disposable income, high unemployment and faltering consumer confidence, sales of new bicycles declined during the recession. Instead, many consumers opted to fix their old bikes in response to the tough times, creating a boom in repair work for bike shops. While the increased demand for repair work was not enough to overcome low sales during the recession, the industry began to rebound and post positive revenue growth in 2010. According to IBISWorld Industry Analyst Vanessa Giraldo, “In the five years to 2013, industry revenue has remained flat, experiencing an estimated average annual rate change of 0.0% to $6.3 billion.”
Weakened by the recession, competition from mass merchandisers like Walmart has hampered industry sales over the past five years. While these big-box retailers are able to offer significant discounts on standard bikes, traditional stores have cornered the market for high-end, more expensive bicycles. But consumers have been less willing to spend on high-quality luxury items in the wake of the recession, causing sales and profit for these niche shops to sag.
Over the five years to 2018, the Bicycle Dealership and Repair industry will have an easier ride. “As the economic recovery continues to take hold, consumers will likely resume discretionary purchases that they delayed throughout the recession and its aftermath,” says Giraldo. While rising sports participation and disposable income will support the industry, external competition will hinder growth, resulting in only minor revenue increases. However, oil prices are expected to begin to increase again in 2015; as the cost of oil rises, many consumers will ride bicycles as a cost-saving alternative to driving cars.
The appreciation of the US dollar during part of the next five years will likely help industry retailers' profit margins, as imported bicycles become less expensive. Operators will benefit from passing on these lower prices to consumers in order to compete with mass merchandisers who offer low-cost bikes to thrifty consumers.
For more information, visit IBISWorld’s Bicycle Dealership and Repair in the US industry report page.
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IBISWorld industry Report Key Topics
The Bicycle Dealership and Repair in the US industry sells new bicycles (e.g. mountain bicycles, road bicycles and hybrid bicycles), bicycle parts and accessories. Industry operators often also provide repair and maintenance services. Used bicycle stores and mass merchandisers that retail bicycles are excluded from this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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