It’s not “inflation” in the formal sense, which is what Bloomberg is implying with the provocative headline. There’s a shortage of bicycles for reasons. There’s also a shortage of lumber for other reasons. Neither of those are indicators of “looming” inflation. If an oil tanker ran aground and killed off a bunch of fish and the price of sushi went up, that also would not “hint at inflation peril looming.” One doesn’t measure inflation by pointing to temporary blips in the supply chain unless one has an agenda.
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Fair…
Although there is a shortage of bike parts, the industry as a whole decided to move prices up regardless of the parts shortage. Same as cars and other things. This is inflation.
It is not the same to an oil shortage (yet), or fish shortages (yet).
This would be more like sushi now cost 20% more because there are more people eating sushi.
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I agree that it’s not inflation. It’s a shortage. The same thing is happening in real estate. The last article I read on that said that the market would normalize in about a year.
I don’t even think the shortage is in framesets per say. I keep hearing that OEMs can’t get groupsets and other parts to build the bikes so they are stuck. They can’t sell a bike without a saddle.
My local specialized shop is having a banner year. They sell everything they get. People drive from 3 states away just to buy a bike. Their service department is book out 3 weeks. Nothing is on sale - everything is sold at full msrp.
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I’m experiencing the same thing with my LBS. The owner and mechanic were basically doing everything themselves before getting extra help. They are definitely feeling overworked and burned out, and I feel increasingly bad every time I have a bike problem (seemingly endless tubeless woes). Worst of all, they rarely are able to get on their bikes anymore to ride with us on their group rides or chit-chat in the bunch.
Really hope the hires they’ve made will give them some more life.
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Right……if you can get bikes, everything is great. Most shops can’t get bikes and have blown through their pre-season orders. That was kinda my point……sure shops are selling every bike they can, but for most shops, that volume is below normal because everything is sold out.
Our LBS was booked out over a month a few weeks ago…and they are dog-tired.
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Incorrect, there is a shortage of raw materials along with a strong yuen and increased shipping costs so brands are forced to raise prices in an attempt to retain margins. Most of these price increases will not even be enough to cover the decreased margins from the last year. This has nothing to do with inflation, it is a necessary move if you want these brands to still be in business in a couple years.
Economics is hard and I know everyone thinks they have it all figured out but there are some huge unknowns in the bike industry right now. Hopefully all the players will make it out the other side.
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And yet another thread on TR goes down the road of semantics and folks arguing about the definition of a singular word.
I noticed something positive that’s come from this shortage, LBS’s who are owned by Trek, Specialized or Giant are sourcing bikes from other, smaller brands like Raleigh, Diamondback, Santa Cruz, and Orbea. That’s nice to see, the big 3 have unfortunately dictated what most shops carry and it’s nice to see some variety, even if the stock is limited.
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So real. So true.
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It’s simple, though. Inflation is a measure of sustained money output. If you can’t spend like that for a full hour, then you need to do a different test!
Wait…what’s this thread about?
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Also a supply issue because a lot of factories shut down during the pandemic. Look at vehicle sales, Ford has parking lots of F150’s waiting on microchips for the same reason.
Bicycles aren’t special, it is just what we feel because it is what we are interested in. I am shopping for a used car, but cars are in short supply right now too. A guy I know just sold his truck back to a Toyota dealer for what he paid for it…5 years ago! It literally only cost him taxes and insurance to drive for 30000 miles.
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Local shops have started putting cable pull disc brakes on builds because you just can’t get hydro parts. If you can do without a new bike right now… just wait another year or two. #notworth Maybe next gen Ultegra will be out by then.
Inflation, at the very basic level, is too many dollars chasing too few goods. COVID caused a reduction in output - potentially too few goods. the government gave people money - potentially too many dollars. I say potentially because inflation is a lagging variable and we don’t know yet. There is a shortage in the bike industry: is this because people like me took their covid money straight to the bike shop when there was a reduction in output (too many dollars chasing too few goods)?
If this is true in a broader sense, these might be signs of looming inflation. If this is unique to a few industries, it might be nothing.
By the way, I do have a PhD in econ.
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Modern Monetary Theory : Planet Money : NPR would say otherwise. The classical theory should have put us in a very bad place given the few trillions pumped into the economy since 2008. I hope the sky stay up and doesn’t fall anytime soon.
I often wonder what the demand curve for “bikes” looks like.
I’ve put off any new bike purchases this year. With the way the pricing has been going as compared to my salary anything I can afford is a downgrade from my current rides. It’s crazy too as I have a fairly well paying job, but I’m not paying $6,000 for a bike with XT on it when a similar spec bike would have easily been had for $4,000 on sale just a couple of years ago. It gets even worse when you figure many of us have multiple bikes… so right now I’m just happy if I can find parts to maintain the ones I have. I broke the crankset on my fat bike back in February and still haven’t managed to source a replacement.
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Chicago: Objection
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That’s more the problem, perspective. Very few people have been paying full retail by the sounds of it. Thus when bike supply is way outstripped by demand, and shops can, and should, expect buyers to pay MSRP then it makes the “inflation” seem far steeper than it possibly really is.
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I suppose, but even so a Trek Supercaliber 9.8 XT is currently $6,300. However, the previous model the Top Fuel 9.8 XT dropped at $5,000 in 2016. So in just a handful of years the MSRP has gone up 25% while the street price has likely gone up over 50%.