High gas prices and falling incomes have kept revenue growth flat.
New York, NY (PRWEB) May 24, 2014
Over the past five years, the 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 Anlayst Vanessa Giraldo. In the five years to 2014, industry revenue has experienced growth, increasing an estimated average annual 1.4% to $6.4 billion. While rising sports participation and disposable income will support the industry throughout the period, external competition will hinder growth slightly in 2014, resulting in revenue dipping a marginal 0.8%.
“Weakened by the recession, competition from mass merchandisers, such as Walmart, hampered industry sales over the past five years,” says Giraldo. 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. However, as consumers continue to recover from the recession, they have been less willing to spend on high-quality luxury items, causing sales and profit for these niche shops to drop.
Over the five years to 2019, the industry will continue to improve. As the economic recovery continues to take hold, consumers will likely resume discretionary purchases that they delayed throughout the recession and its aftermath. However, many consumers will ride bicycles as an environmentally friendly and cost-saving alternative to driving cars, which will boost industry sales.
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 pass on these lower prices to consumers to compete with mass merchandisers that offer low-cost bikes to thrifty consumers. As a result, industry revenue is projected to grow over the next five years.
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 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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