British Cycle Sales Hit 39 Year Low

Reviewed by

Christopher Andersen

Reviewed by Christopher Andersen

Chris is an Insolvency Practitioner regulated by the ICAEW since 2014,. He is experienced in contentious insolvency with excellent analytical skills and strong knowledge of both general and technical insolvency matters.

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24th June 2024

After record highs during the pandemic, as people purchased bikes to avoid public transport and keep themselves healthy, UK cycling now appears to be in significant decline.

The British Cycling Association’s Annual report notes that ‘The volume of mechanical bikes sold in 2023 fell a further 5% (following a 23% drop in 2022). This is likely to be the lowest level of bicycle volume sales during the current century to date^[1]Trusted Source – GOV.UK – BA 2023 ANNUAL MARKET REPORT.’

Insolvencies Continue in the Cycling Industry

Last week’s liquidation announcement of Derby-based Mercian Cycle follows a string of high-profile insolvencies in the cycling industry. During 2023, Wiggle Chain Reaction entered administration, as did British mountain bike manufacturer Orange. Leading kids’ bicycle manufacturer Isla ceased production, citing a ‘turbulent and difficult time for the cycle industry,’ which has left the directors unwilling to continue.

It’s not just the bike manufacturers who are struggling; Sweetspot, the organisers of the Women’s Tour, appointed IPs from KRE to act as liquidators after losing its contract with the governing body, British Cycling.

So, what are the headwinds facing the industry?

Worst Mechanical Bike Sales This Century

Several interrelated factors are contributing to the industry’s decline:

• Economic Challenges: The overall economic environment, including inflation and rising living costs, has led to decreased discretionary spending. Consumers are prioritising essential expenses over purchasing new bicycles.
• Supply Chain Issues: The industry has faced significant supply chain disruptions due to the COVID-19 pandemic, Brexit, and geopolitical tensions. Attacks by Houthi rebels on commercial vessels in the Red Sea have prompted an increasing number of firms to pause shipments through this key international trade route, further exacerbating problems and raising freight prices.
• Market Saturation: During the pandemic, there was a significant increase in bicycle purchases. This surge has led to market saturation, with many consumers now owning bikes and not needing new ones.
• Changes in Consumer Behaviour: The initial surge in cycling during the pandemic has not sustained as restrictions eased and lifestyles reverted to pre-pandemic patterns.
• Large Overstocks: The surge in demand during COVID-19 led to overstocking by manufacturers and retailers.

Cycle Industry Launches Manifesto for Growth

To address the challenges facing the UK cycle industry and support its growth, the Bicycle Association has put forward several policy proposals in their manifesto. Here are some key recommendations that could help save and improve the industry:

1. Accelerate the uptake of e-bikes through a national subsidy scheme. The manifesto states, “Subsidise access to e-bikes to accelerate the uptake of this clean, low-impact mode of transport and give 1 million more people access to healthy, low-cost transport by 2030.” They propose an initial fund of £100 million per year to provide £300 discounts on e-bikes and specialist cycles.
2. Widen access to mobility by implementing a “quick win” policy of zero VAT on children’s cycles. The manifesto argues this would “ensure every child has access to a bike as they grow up, to prepare a generation for active travel in the clean cities of the future.”
3. Grow cycle industry jobs by building “industry innovation capability with a test lab, electrification safety and performance centre, smart tech leadership and innovation-friendly regulations.” The manifesto also calls for supporting “re-shoring, the industry’s sustainable materials and circular economy package, and UK Bike Valley initiative.”
4. Support the industry’s workforce by “delivering a National Training Centre and by acting on career mapping, training and qualifications.” The manifesto emphasises the need to attract and upskill a diverse workforce to address skills shortages.
5. Reform business rates relief and provide other financial support measures to boost the network of local cycle retailers and repairers. The manifesto states these businesses “invigorate high streets in every community” and provide essential services.

As the manifesto asserts, “With the policies proposed, this will drive substantial industry growth with a five-year timescale.”