Cycle shop sales bounce back in February
Posted on 20 Mar 2010
Specialist cycle retailer sales volumes increased by over 20% in February vs. January. Total core sales increased by 7.6% like for like vs. February 2009.
The early part of the month was still impacted by poor weather and February 2009 was the poorest performing month of the year vs. 2008, but cycle shop sales growth was well ahead of the general UK retail trade in February 2010.
It's impossible to make any assumptions regarding 2010 at this stage, but the industry appears to have shrugged off the slow start as a weather blip and remains generally positive.
Most suppliers are reporting an acceptable start to the year, with the main limitation to growth being retailer credit, impacted by restricted cash flow over the past 3 months.
The number of businesses reporting a sales shortfall in excess of 20% vs. 2009 in the month reduced from 53% in January to 23% in February.
The number of businesses reporting a sales growth in excess of 20% in the month increased from 13% in January to over one third of those surveyed in the month.
February Cycle Retailer Fact File
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February like for like core sales increased 7.6% vs. 2009 (Jan -17%; Dec 3%)
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34% of retailers reported sales UP by more than 20% in February 10 vs. 09 (13% Jan; Dec 23%)
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7% of retailers reported sales UP by between 10% - 20% in February 10 vs. 09 (Jan 5%; Dec 10%)
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12% of retailers reported sales UP by between 1% - 10% in February 10 vs. 09 (Jan 6%; Dec 15%)
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13%% of retailers reported sales DOWN by between 1% - 10% in February 10 vs. 09 (Jan 9%; Dec 17%)
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11% of retailers reported sales DOWN by between 10% - 20% in February 10 vs. 09 (Jan 14%; Dec 13%)
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23% of retailers reported sales DOWN by more than 20% in February 10 vs. 09 (Jan 53%; Dec 22%)
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The overall increase in the growing businesses was 27.7% vs. February 09 (Jan 21.7%; Dec 22.4%)
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The overall decrease in the shrinking businesses was -20.1% vs. February 09 (Jan -28.7%; Dec -16.4%)
It remains of ongoing concern that the majority of retailers are at either end of the performance scale, in normal circumstances the peak would be in the mid-performing range, but this is a consistent trend, reflecting gradual market polarisation.
The Wider Picture
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2009 total annual like for like core sales growth was 5.7%
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Quarter 4 2009 like for like sales growth was 11.2%
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2010 year to date like for like sales have decreased by -5.1%
Market feedback for March suggests that the specialist cycle sector will achieve a cumulative sales growth year to date ahead of Easter, wiping out the wintry weather deficit.
The greatest concern appears to be the gross profit being achieved on these sales as Sterling continues to weaken and the VAT increase bites, with a further increase likely to follow.
Market research figures were derived from c.300 specialist cycle retail businesses and workshops throughout the UK, representing c360 shop fronts ranging in size from annual turnovers of £25k to £5m. The performance figures apply to core like for like retail sales only; they do not include sales achieved via retail finance, cycle to work schemes or other non-core sales transactions, which will increase growth rates accordingly. No internet/mail order ‘only' businesses participated in this research.
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