the british [HTML_REMOVED]#163;[HTML_REMOVED]#163;[HTML_REMOVED]#163; pound (stirling) is in similar position to the loonie, and since alot of stuff is being sourced from US companies paid for in US$ or Taiwan also paid in US $
when sterling was 1.9 against the US dollar we had good leverage, its now 1.4 and the gap is starting to be felt
our trade costs are starting to rise dramatically, and we are having to increase retail prices as the margins are too small on most bike stuff to allow the increase to be absorbed
its not just the weak pound (or loonie), costs for raw materials, factory production, fuel, shipping etc. is also rising and our suppliers are raising all their prices
in the UK, Shimano just went up about 10-15[HTML_REMOVED]#37; on Wednesday this week
tires have gone up dramatically in the last 2 months, as have inner tubes (a Maxxis DH tube selling at GBP[HTML_REMOVED]#163;8 in August is now [HTML_REMOVED]#163;12)
US boutique import frames are going through the roof - Santa Cruz frame selling at GBP[HTML_REMOVED]#163;1700 will probably be [HTML_REMOVED]#163;2300 by Christmas, with some of the high end DH frames hitting [HTML_REMOVED]#163;3000
a Taiwan frame we sell at GBP[HTML_REMOVED]#163;900 is going to be around [HTML_REMOVED]#163;1200-1300 by Christmas
production bike prices have risen about 10-15% on Specialized, Giant, Trek, etc. or pricepoints have been held with downgraded forks, components, etc.
the end of "cheap" living?
good shops will survive, but I expect the currently over saturated 2nd hand market to be re-invigorated, customers are already looking for big price cuts especially in the high end market and we are looking at discounting incoming 2009 stock to remain competitive, and 2008 is becoming very easy to sell due to the disparity between 08 prices and 09
gotta keep it tight (keep costs as low as possible) and give great service
one sector that is growing is the "credit crunch pedallers" as they have been labelled..people ditching cars and buying hybrids and entry level MTN bikes for low-medium mileage commuting and getting around