The cost of living crisis has put immense pressure on bike retailers, with nearly half of UK consumers unable to afford a new bike outright. Despite these challenging conditions, bike retailer Paul’s Cycles has achieved nearly 20% YOY sales growth over the last 6 months, following 13.7% growth last year.
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As cycling participation rates are back at pre-pandemic levels, cycling retailers welcome the new Transport Secretary Louise Haigh’s promise to invest “unprecedented levels of funding” in active travel.
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Despite the rocky industry landscape, online bike retailer Paul’s Cycles is climbing steadily, reporting a nearly 20% YOY sales growth and 16% increase in profit YOY.
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The independent brand’s success is in part credited to its continued focus on the off-road adventure cycling categories, which are growing in popularity, as well as its aim to provide customers with value for money.
Paul’s Cycles Managing Director Tom Thornley shares insights on the industry trends behind their success:
The rising popularity of off-road adventure bikes
With the term ‘mountain bike’ receiving over 22K monthly searches in the UK, compared to 9K for the term ‘road bike’, Thornley notes: “Anecdotally, we’ve seen a decrease in road cycling in recent years which may have seen riders seek out off-road over tarmac. As per studies we’ve conducted, riders report increasingly feeling unsafe riding on Britain’s roads, which may explain why so many are looking to off-road alternatives.”
“This doesn’t mean road bikes are out of the picture” Thornley points out, “The new government’s promise of additional funding should hopefully reinvigorate road cycling, provided it is used to improve Britain’s cycling infrastructure.
Despite E-bikes growing in popularity in recent years, undoubtedly, the MTB category has been a driving force behind Paul’s Cycles’ recent success. Reporting a whopping 300% profit increase compared to last year’s figures, Mountain bikes now account for over 40% of all the brand’s bikes sold, showing just how popular the retailer’s deals have been with customers.
Despite industry challenges around poor availability in 2024, Gravel bikes were also popular, as sales more than doubled (104%) over the same period. Thornley comments: “Due to gravel bike supply issues, we haven’t been able to secure a lot of models that pass our quality standards in the last quarter, which is frustrating as we’re heading into the top season for this category. As product availability recovers, we expect gravel bikes to be a big growth area for us in 2025.”
Thornley concludes: “Off-road adventure bikes have always been our strongest categories, and we have made some exciting additions to our range this year. Most recently, we forged a new partnership with globally renowned Trek bikes, expanding our premium product offerings.”
E-bikes – a strong contender in 2024
While 2024 is being hailed as “the year of the e-bike,” with e-bikes being seen as crucial to reducing car dependency, the UK seems to lag in this shift, trailing behind other European countries in terms of sales. Despite this, Paul’s Cycles has experienced continued success in this competitive market. Thornley highlights: “E-bikes remain a key driver of our revenue, and while the market has become increasingly competitive with limited supply, we have seen a 12% increase in electric bike sales this year.”
Despite a challenging market with average e-bike price points declining by 14% and tighter margins due to factors like oversupply and reduced RRPs, Thornley remains optimistic: “We’ve strategically focused our inventory on electric mountain bikes, which resonate strongly with our core customers, resulting in a 14% year-on-year increase in sales for this category.”
Thornley expects that e-MTBs will continue to be competitive: “I think it’s clear that this year saw the industry working through the tail end of the high-demand surpluses for e-MTBs. With that comes lower margins and average prices, as the high-demand bikes are all gone. Many brands are out of decent sizes of e-MTBs until 2025 lands. This situation is even more significant in mid- to high-end road and gravel bikes, which saw poor product availability in 2024.”
Looking ahead, Thornley emphasizes the continued importance of e-bikes in their product lineup: “With growing interest in active and sustainable travel, electric bikes will remain a cornerstone of our offerings into 2025.”
Value tops price in today’s bike market
Things move rapidly at Paul’s Cycles, with new deals landing every few weeks and high stock turnover speed keeping the small team busy. Since the company was founded in 1983, the team has gained an in-depth understanding of the market, Thornley explains: “Our focus is on value for money for our customers, and we don’t believe that the latest model year indicates value Instead, we secure significant bulk purchasing deals for high-quality products, which we can offer to our customers at great-value price.”
“And this is what our growing customer base want! Our recent figures show that despite the tough economic times, customers are still looking for high-quality products, rather than low-cost alternatives” Thornley concludes.
Looking ahead
Looking ahead to the next year, Thornley notes: “For 2025, our strategy is simple: we will target key high-demand areas like Road, Gravel and e-MTB, and ensure we have sufficient stock to meet demand. We can combine that with select pockets of deal bikes, but we will need to be careful as dropping RRPs on 2025 stock means the old stock will need to be priced correctly too.”
Thornley stresses that besides their strategic focus on industry trends, a customer-centric approach remains the most important part of Paul’s Cycles success: “Our dedication to easy, honest customer support continues to be a cornerstone of our strategy, placing equal importance on both pre and post-sale support.”
For more information, and to keep up-to-date about new product launches and partnerships, visit the Paul’s Cycles website.