IBD FOCUS
A global issue One of the big challenges of 2021 was shortages in stock, with rising demand having knock-on effects along the supply chain.
“The issue of supply is compounded by the fact that
the problem is no longer localised, explains 7hundred’s Dave Butcher, in Windsor, Berkshire. “This is now global. No more competing for materials and bikes from UK stocks – we are all now in the same pool and the water is drying out.” While stores and suppliers are doing their best
to forecast what bikes and parts will be in demand, Butcher stresses that “we must all be prepared for any dates to slip in the coming months and years”. “We – like all those further along the supply chain
– are working on estimates. Estimates based on the information currently available in the system. There are so many variables involved that nothing can be certain.
‘Supply chain issues have plagued all industries but the cycle industry has really suffered in 2021’
“We are in a chain that is hard to manage for everyone involved – not just us – and this makes delivery dates highly volatile. Compound this with worldwide transport problems, a shortage of shipping containers and space on aircraft and – coupled with the fallout surrounding Brexit – and some forecasters foresee that the carnage will continue until at least the first half of 2023. Brace yourselves!”
Shot in the arm Covid lockdowns and the recovery period that we are now in continues to present lots of challenges, says Jon Dean of CycleStreet in York, but it has been the ‘shot in the arm’ the industry has needed – by injecting cash into those businesses that were brave enough to forward order when Prime Minister Boris Johnson told everyone to ‘get on your bike’. “However, this has compounded the supply
problems that we are enduring now where most UK residents are ‘over’ Covid and are beginning to forget that the rest of the world, particularly the less organised and or less vaccinated Asian economies, have any issues with Covid,” says Dean. “The boom and bust nature of supply currently is proving
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particularly stretching financially in a time of year when traditionally most businesses are buying as little as possible rather than stocking up for next year, because it is unlikely that stock will be freely available in spring when we traditionally schedule our deliveries.” Andrew Manning, director at Cyclelink Services in the Surrey village of Thames Ditton, says that historically, the business ran a just in time model ordering up parts for repairs as it needs them. “Pre- pandemic, we could order one day and be fitting parts the next.
“Supply chain issues have plagued all industries but
the cycle industry has really suffered in 2021. When parts are available, we are purchasing multiples which means we are holding far more stock than we did and this is having a negative impact on cash flow. “The limited availability of new bikes means that many people have released old bikes from sheds where they have laid unused for some time. Managing expectations over costs of repair of these machines has been hard even with the Government Fix Your Bike Voucher. £50 does not go a long way. “Although many cycle shops have been in a better position over the past 18 months than other high street retailers, we have seen several well-established cycle businesses reduce their number of premises or close down completely in 2021. This has, inevitably, increased demand for our services. “It is our hope that supply will improve through 2022 but we are aware that this will not happen before the spring. We are hoping to see more footfall as we get used to living with and avoiding the terrible effects of Covid. This will allow us to engage more with our customers, reduce stock levels and improve both cashflow and profit.”
2021 was a great year in terms of sales and growth, says Blazing Bikes December 2021 | 43
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