Chain Reaction Bike Shop

Chain Reaction Cycles – again the world’s biggest bike shop?

This is confusing – a new report by the European bicycling trade publication Bike Europe talks about the ‘low’ growth of Chain Reaction Cycles (CRC), calling them the world’s LARGEST bike store. In this blog we recently looked at stats from previous years showing that Wiggle had taken over from CRC based on total sales volume: Has Wiggle beaten Chain Reaction Cycles to the Top Spot?

While it may just be simple rivalry, being the biggest, or the largest or the best is still a selling point. And perhaps it is just in the detail, with LARGEST being about range, they have just over 66,000 products for sale. This may… or may not include product variations (eg, black, white, silver or S, M, L, XL).

In comparison, Wiggle list just over 12,000 products, a mere 18% of the range from CRC. But considering Wiggle have recently been top-dog in sales turn-over, it certainly suggest that a broad product range alone is not the sole indicator of success. Until the reports for Wiggle are out, CRC probably are the Largest while Wiggle may remain the Biggest.

Make no mistake, these are both massive stores with a large customer base. The Bike Europe article talks about Small Growth of only 6% for CRC. They compare this growth to smaller (undisclosed) online bike shops which is where some criticism of this comparison is warranted.

At the top-end in a saturated market with fierce competition from direct competitors and new and niche players, growth is tough. Cycling is growing but the new bike stores, particularly outside of the UK with retailers who serve local markets and are an alternative for new buyers (to the big overseas retailers). Younger online bike stores can also afford to be more dynamic and cater to niche markets.

But critically, is exponential growth always the perfect measure of success – what about stability and sustainable turnover with stable or efficient profit margins?

A few interesting statistics, from the 2014 financial year reporting, the CRC turnover was £153 million with pre-tax profits of £4.8 million. The margins are low in the high turn-over world of online sales and it seems that Chain Reaction Cycles have been concentrating on streamlining – with much less overseas publicity and advertising as in previous years.

Bike Europe also reports that staff numbers have been reduced from 612 to 540.

 

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