Walmart cutting down prices…will bicycle retailers do the same?

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Wal-Mart announced Tuesday that it will chop prices between 10 to 30% this week on groceries, electronics and other home-related products in an effort to keep its cash-strapped consumers excited about shopping.

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Traditionally winter has always been the slow season for bicycle retailers. You’ll often find that shops are more likely to sell previous year’s models right above cost or sometimes at or below cost just so they can move merchandise. But with the current economic state that we’re in, analysts are predicting that we are heading for a recession. Some even say that we’re in it already.

With that in mind, I’m wondering if some bicycle retailers will adjust their prices in order to attract business during the slow times. If they don’t I’m curious to see if they are more willing to bundle items together to see more of it. For example, if you were to buy a $900 bicycle, would they throw in a free helmet and water bottle? What about giving incentives to customers such as a free tube with any purchase over $40?

But the other side to this dilemma would be that people are going to ride their bikes more often, especially with the higher gas prices, global warming and etc. People are more likely to ride bikes now than they ever have before. The whole bike industry is gearing up for utilitarian style bikes and have the bike commuter in mind when it comes to new products for 2008. I wonder if the surge of bike commuting will help sustain the bicycle retailer during slower times.


15 Comments

  1. Moe January 29, 2008 10:18 am 

    I talked to a shop associate about bike discounts, it seems that the trend is backwards. He claimed that the prices of bikes will rise due the higher cost of shipping (makes sense) but also the higher cost of chrome (huh?). Will the utilitarian market help the industry? We are a small minority, what the industry needs is another Lance Armstrong….

  2. RL Policar January 29, 2008 10:48 am 

    I vote for Jeff, Russ and Jack to lead this bike commuter revolution. Besides you guys are way better looking than Moe and I…you’re like eye candy for the site. So go on, become the next Lance Armstrong for Bike Commuting….

    dude we should launch a campaign and do posters and articles like…”If Russ can Ride, So can you!”

    Or “Jack does….do you?”

    “Chicks dig it…” with a picture of Jeff surrounded by women oohing and aahhhing over his bicycle!

  3. Ben C January 29, 2008 11:50 am 

    That is a GREAT idea. Maybe we can put an advertisment on my mobile bikeboard when I put it together.

  4. Ghost Rider January 29, 2008 11:52 am 

    I vote for the Jeff idea. Ha ha…that would be AWESOME!

    Chrome, as you might know, is a crucial component in chromoly (also known as chrome-molybdenum steel alloy). I can’t imagine the price of this fluctuating so much that it drives the bike industry to raise their prices, but then again, I know nothing about the metals industry.

  5. Moe January 29, 2008 12:38 pm 

    Although the dude was referring to Chrome plated parts (handlebars, rims) Your answer makes more sense.

  6. Dominic Dougherty January 29, 2008 2:35 pm 

    If Congressman Blumenauer (D-Ore) has a say in anything, bicycle prices could be dropping.
    For those that haven’t heard or could care less about politics, he introduced a series of bills to Congress to suspend tariffs on bicycle components not manufactured in the US.

    Cheaper components for builders, means cheaper bikes for consumers. Sweet.

  7. Fritz January 29, 2008 3:26 pm 

    There are a ton of factors coming together right now that increase of the cost of “stuff”: we’re all aware of higher energy costs, and you guys already mentioned the increased cost of chrome.

    Higher energy costs isn’t just shiping — it also mean higher production costs. You guys are aware that China just recently figured out that they no longer produce and import enough coal to run their power plants? No power = no bike factories making bikes and bike parts, no producers making steel and aluminum tubes, no processors smelting ore into aluminum and steel.

    The U.S. $ has also fallen sharply against most major currencies.

    (I saw the bills Blumenauer introduced the other day.)

  8. r. January 29, 2008 6:25 pm 

    I really hope that retailers don’t cut down on prices. I think more people need to look at working up an old beater at a local coop. I have an even better idea: people should start more bike coops.

    A lot of stuff made in China is flimsy and won’t last long. I subscribe to a really great podcast called the Bike Show (http://www.thebikeshow.net). They interviewed a really cool guy that runs a bike junkyard. His views on the industry were pretty dead on.

    We live in a throw away society and inflation is constant reality for the moment. So, I say instead of throwing perfectly good stuff away we open coops. Working on bikes as a family or a new commuter is a great way to get nipped with the bike bug. Plus, it’s family friendly and you meet awesome people.

    I say let the prices get higher b/c I need to put some money away in a savings account anyway.

  9. Jeff the Veloteer January 29, 2008 6:38 pm 

    Man, I wish I would have read these comments earlier – I feel like I just got volunteered for something…not that I am complaining. I’ll pay my own way out to Cali if you guys set me up for a photo shoot with all of those women!

    R. – you are dead on. Our throw away society depends too much on NEW, when there are plenty of still functional bikes and parts out there. Co-ops are great!

  10. Quinn January 30, 2008 9:42 am 

    For me, and all of Reno, prices have shot up for ’08.

    As far as metals, Jack is right, chromo (steel) is much more a processed composite metal, where a raw form of Al. is naturally occurring, Steel is not, and the cost of the processing is what the cyclist is paying for.

    Co-ops- I am all for the idea, BUT, the 1 here in Reno has no mechanics that Know what they are doing, yet are cheap, so now people are going to them, getting bikes that Barely work, instead of going to an established shop, having the work done by an experienced mechanic, and in turn putting money back into the local economy.

    ok, IM done.

  11. Mike Myers February 1, 2008 2:40 pm 

    There are a couple of approaches, I think, to selling commuter-specific or utility bikes. The first is to sell the bike as a complete package—fenders, lights, racks, etc (Does anyone sell bags as part of a package?). This increases the price of the bike but probably saves the consumer money over buying accessories a la carte.

    The second is to sell the bikes stripped and have the LBS sell the accessories. This increases the shop’s profit, or so I’ve heard, but is costlier and more complicated for the consumer.

    Which would you prefer? I’m kind of picky so I’m sure some part of the package wouldn’t appeal to me. BUT—if the price was right I could deal with that.

    I’m really thinking about buying a GF Simple City when it hits the market. The 8 speed will come with the front basket and fenders for MSRP $799(according to an email I got from Fisher). You know what’ bothering me? I won’t be able to get a rear rack to match the color. OCD, man, OCD.

  12. Moe February 1, 2008 2:50 pm 

    Mike,

    Have you checked out the Breezers? The Villager 7 has 7 internal gears (thus the name), rear rack, fenders, full chain cover, bell and a light set with a dynamo. The price range is about the same as the GF.

  13. Mike Myers February 1, 2008 4:17 pm 

    Moe—

    The Breezers are well-thought-out bikes, but the placement of the light pretty much negates the use of a basket. I’m pretty sold on my next bike having a basket. I think it would increase my cargo capacity and utility quite a bit. Plus the basket on the GF SC looks pretty awesome. :-)

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