Bike sales cruising despite recession
Concerns over gas prices, environment boost Palo Alto bicycle sellers' bottom lines
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 firstname.lastname@example.org.