Traxio: ‘Bicycle shops give huge discounts to clear stock’

Bicycle shops and manufacturers cannot get rid of the enormous stock they have built up after Corona. Research by mobility federation Traxio shows that six in ten bicycle shops currently offer discounts of 20 percent and more. For the first time in five years, the Belgian bicycle retail market sees a decline in turnover this year.

“During the coronavirus years, demand was enormous, and supply was small. After that, a lot was produced, ordered, and invested, but the cycling enthusiasm subsided somewhat afterward. This wet year, in particular, was not good for sales,” says Frank Glorieux of Traxio Velo, the professional federation of retailers and wholesalers in the bicycle sector. “There is an oversupply, which puts enormous pressure on prices.”

Too much stock

The total bicycle market shrunk by 8.3 percent in 2024, but the big problem is too much stock. Moreover, manufacturers and stores need liquidity.

In 2023, the Belgian bicycle market grew by 7%, mainly driven by the largest retailers. “However, after five years of rapid growth, the market is already reaching maturity,” explains Miguel Van Damme, Managing Director & Partner at BrightWolves. This agency analyzed the health of the bicycle retail industry on behalf of Traxio.

E-bikes still dominate sales

Growing competition, large stocks, and declining demand have led to stock liquidations, with 34% of bicycles being offered at significant discounts of an average of 19%. Forecasts for 2024 indicate a decline in turnover of 10% to 20%, driving retailers to prioritize profitability in a consolidating market.

E-bikes still dominate sales, accounting for 64% of all bicycles sold in 2023. More expensive options such as e-cargo bikes and speed pedelecs contribute to higher turnover but increase costs. Leasing has become an increasingly important sales channel, but it has also reduced retailer profit margins by about 10%.

How to maintain stability?

Major retailers remain financially stable, but smaller stores are increasingly experiencing debt increases, averaging 50% above their annual turnover. Operating margins have fallen sharply from 18% to 8% over the past four years, partly due to high margins, inventory costs, and significant discounts on bicycles. In 2024, 34% of all bicycles were discounted at an average discount of 19%.

With an expected market decline, bicycle dealers will have to focus on their company’s profitability. This includes disciplined financial management, efficient inventory management, and profitable aftersales to maintain stability in a challenging market.