http://paloaltoonline.com/print/story/print/2009/01/02/bike-sales-cruising-despite-recession


Palo Alto Weekly

News - January 2, 2009

Bike sales cruising despite recession

Concerns over gas prices, environment boost Palo Alto bicycle sellers' bottom lines

by Sue Dremann

At a time when doom-and-gloom reports on retail sales are making headline news, the fortunes of some local bike shops continue to speed, managers and owners said.

Retail sales are down 2 to 4 percent for the year and as much as 8 percent with auto and gas sales factored in, according to SpendingPulse, a division of MasterCard Advisors.

But sales of mid-priced and street bikes are up locally, as is the demand for repairs, Palo Alto bicycle sellers are reporting.

"When gas prices went up they were bringing them out of the barns," said Jeff Kistler, a mechanic at Cardinal Bike Shop on El Camino Real.

High gas prices, concern over global warming and a general desire for fitness have driven more people to opt for bikes, local store owners and managers said.

Palo Alto Bicycles is having its second-best year in its 78-year history, according to Jeff Selzer, general manager of the University Avenue shop.

Last year ranked as the store's top sales year.

In November and early December, sales were slightly down by 1 to 2 percent for the year, but averaged over the last five years, business has gone up 8 percent. And when the final numbers are in, 2008 could meet or beat last year's totals, Selzer said.

"What we discovered with cycling is that when the nation gets challenged, bike sales go up. It's a recession-resistant business; it's almost a problem-resistant industry," he said. That insulation is helped by Palo Alto's strong biking community, he added.

On Tuesday afternoon, five days post-Christmas, the store was bustling. Salesman Martine Dixon measured the angle of potential buyer Scott Surrette's knee with a builder's plumb, dropping the weight on a string from knee toward the floor. Every aspect of the body's interaction with the bicycle is checked so that elbows remain unlocked, one's reach not over-extended, and back and hips are unstrained as the pedals are rotated.

Surrette and his father, Tom, had traveled from San Jose after reading a favorable review of the store online — part of the contemporary shopping experience that is bringing in new customers from out of town.

Scott Surrette checked out a $600 road bike. A third-year biology student at U.C. Davis, he enjoys mountain biking, but he's looking for ways to ditch his car.

"I'm trying to do less driving. It's cheaper," he said.

Frances Manfrey and her husband, Mark, were shopping for a commute bike for her to take to work at Stanford University School of Medicine. The San Carlos couple lives near the Caltrain station specifically so they can reduce their carbon footprint rather than drive.

For the last four years, Frances Manfrey has ridden a bicycle, rain or shine, to and from the train depots. But now she wants a fold-up bike that she can ride further into campus, since her office has moved. The single-gear, fold-up bike, ranging in price from $500 to $800 sports tiny tires and a funny profile. But it is the one kind of bicycle allowed in the train car, she said.

"I've driven in the past year one time to work," she said, noting that Stanford provides incentives for employees who go green.

Some bike-shop owners remain cautious about their good fortunes. The slight drop in sales in November and early December coincided with the slide in oil prices, and no one knows if it portends a slide similar to the overall retail market. But those with a long business history remain upbeat.

Palo Alto Bicycles opened its doors in 1930 during the Great Depression. And nearly every decade in the store's nearly eight-decade history has presented singular challenges, all of which the store survived, Selzer said.

"We've weathered recessions before, and I'm optimistic now. We have seen down times when you don't flourish, but you don't get hammered," Selzer said.

But people are downsizing, he noted.

"The high-end road bikes ($1,500) have slowed down this year and entry-level, mid-range $400 bikes are up," he said.

The store even makes money from people who are dusting off old bikes, by selling them gear from its "boatload of accessories" — new helmets, gloves and other gear, Selzer said.

At Velo Tech on Emerson Street, a pro-cyclists' shop, sales of pricey carbon, titanium and unabtanium models have remained steady, owner Mark Richard said. But Richard is expanding his line to city and commuter bikes in response to an increase of interest, he said.

High gas prices may have been the initial impetus for the boost in sales, but many customers want to maintain a lifestyle change they began, according to Mike Boester, manager of The Bike Connection on El Camino Real. Everyone from students to retired persons is pushing pedals, resulting in a 15-percent rise in sales of commute bikes, he said.

Selzer suggested that the reason for the industry's relative stability is a simple one: "If people get nervous about money and the future, biking lets you feel like a kid again."

Staff Writer Sue Dremann can be e-mailed at sdremann@paweekly.com.

Comments

Posted by Greg K, a resident of Downtown North
on Dec 31, 2008 at 4:35 pm

I think it is great that more people are biking around town. More bicycles = less pollution, less global warming, less offshore drilling, less money to OPEC.

Now we just need to work on improving bicycling facilities around town, especially secure bicycle parking and safe bike routes avoiding high-speed car traffic (e.g., freeway interchanges).


Posted by Resident, a resident of Another Palo Alto neighborhood
on Dec 31, 2008 at 5:16 pm

Opening up the paths beside the creeks would be really helpful to give bicyclists a safe path without traffic. A map of Palo Alto bike paths would also be very helpful.


Posted by Richard, a resident of Midtown
on Dec 31, 2008 at 5:49 pm

Palo Alto bikes have great bikes and equipment to chose from. Their service is top notch too. Just sold my crappy Specialized for one of their Trek Madone. Love it. My wife bought a Look bike. Keep the money in our city!


Posted by Greg K, a resident of Downtown North
on Dec 31, 2008 at 5:54 pm

There is a detailed map of current bike routes and bike paths on the city of Palo Alto web site.

Unfortunately, the designated routes from anywhere in Palo Alto to anywhere in East Palo Alto is very convoluted. And there are no designated bike routes to the city parks on the west side of I-280 (Arastradero and Foothill Parks). We really need to work on filling in these gaps.


Posted by Hulkamania, a resident of Duveneck/St. Francis
on Jan 3, 2009 at 8:56 am

A friend has a stationary bike. It didn't start out that way.


Posted by Tim, a resident of Crescent Park
on Jan 3, 2009 at 9:32 am

Heard on KGO yesterday that new bikes sales were way down, but used bike sales and repairs are way up. Sales for used bikes on Craigslist and eBay are strong and people are pulling their dusting bikes out of the garage and getting them tuned up.
This interview was from a person who works for the city of San Francisco, who keeps track of what transportion people use.
I just fixed my older Cannondale, put a rack on the back and now ride it to the store and coffee shop.


Posted by Rob, a resident of Woodside
on Jan 6, 2009 at 2:37 pm

I'd like to see more valid evidence of bike sales being strong right now. Sure they were strong for 2008, as gas was close to $5 and the Bay Area didn't even notice much of the early recession. But for the last quarter of 2008 through now, I can't imagine many folks buying bikes over $250 or so. Who would buy a high end bike when their 401k is smushed and you fear a layoff? I bet these reporters simply asked some $8hr bike shop dude how business is and the dude said it was busy.


Posted by Bond, Kim, a resident of another community
on Sep 6, 2009 at 9:33 pm

The bike shop owned by a friend of mine in Texas is booming, furiously busy on fri/saturday with great sales of accessories, repairs, fits and bikes ranging from $300-4000.
and this is Sept. 2009. People obviously have not stopped their love of all things bicycle.