LAS VEGAS, Nev. (BRAIN) — In three terse sentences, Jim Kersten’s opening remarks set the tone for the NBDA Retailer Summit last week. “The calvary is not coming; there’s no bail out on the horizon; the future of your business is in your hands,” Kersten, CABDA’s show director said.
Kersten’s brief comments as the summit got underway were echoed throughout the two-day event — it was the second NBDA summit and CABDA’s second show to be held in Las Vegas. Throughout the two days of seminars and hallway chatter, dealers and suppliers voiced ongoing concern, and some fear, about the state of the industry and the long-term impact of the ongoing war with Iran.
Among key points discussed among suppliers and dealers were:
- How will the current chaos in the global economy, thanks to unpredictable tariffs and the Iran war, impact dealers and suppliers throughout the rest of the year?
- As gas prices remain high — and they could go higher — will consumers tighten their grip on their wallets as they pull back spending for nonessential items like bikes and accessories?
- While inventory issues appear to have eased, some of the inventory on hand fails to match current consumer demand. The issue is growing more complicated as dealers pull back on forecasts and suppliers tighten 2026 new product deliveries. That’s sparking concern over future shortages of in-demand products.
- Dealers are under more financial pressure today than in years past as sales slow, prices increase, labor and operational costs rise, margins are compressed, and fewer new cyclists are entering the market.
- E-bike sales have given dealers a boost over the last few years, but with entry level models among IBDs starting at around the $2,000 mark, will consumers in an uncertain economy plagued by high gasoline prices delay making a purchase or just walk away. Anti-e-bike legislation, particularly New Jersey’s recent law, are also a nagging concern among dealers and suppliers.
While many of the seminars offered advice and suggestions on how best to maneuver through the rest of the season, no one offered a clear-cut strategy for success as spring leads into summer. For example, during an informal chat with a group of dealers and suppliers, Bob Margevicius, Specialized’s executive vice president, was asked by one supplier, “Do you have a strategy that you could recommend for the rest of the year?” Margevicius looked at the group, frowned, and answered in one word, “No.”
However, with an unpredictable year ahead, Margevicius said dealers and suppliers need to reestablish trust that was destroyed during the COVID pandemic. “It’s essential,” he said, citing several rules everyone should follow. Accurate forecasting. Purchase order integrity. Transparent transactions. On-time payments. Sharing of market data.
Bill Schouman, QBP’s vice president of sales, said the supply of parts and accessories is much better today; lead times are a bit longer “but manageable.” Still, dealers are in a “pretty precarious” situation. “We’re seeing a lot exiting the business, but those who remain are doing well,” he said.
Over the next six months, Schouman predicts a modest amount of discounting, but that discounting will mostly clear out old inventory. As for tariffs, when Trump first imposed them, many thought it would be a short-term issue. Wrong. QBP, and others, have been absorbing higher prices and/or sharing increases with manufacturers.
That’s not going to last, but at the moment most products are fully tariffed. “It’s very lumpy,” he said referring to the wildly disparate tariffs applied to Asian manufacturers. “There’s just no clear pathway, particularly for steel and aluminum. It’s just very unclear what we’re dealing with,” he said.
Consumers are also facing their own issues. So how will consumers, caught in so much economic uncertainty, fare this year? Donny Perry, vice president of strategy at Orange Circle Studio, said that the so-called K-shaped economy, which bifurcates consumers by income, does have implications for the industry.
There are the haves and the have nots and it’s the "haves" who’ve set dealers up for success over the last five years, said Perry, who’s spent years with companies like Specialized and Fox. The wealthy are unlikely to change their spending habits; the poor adapt as needed, but the middle class plays a crucial role. “And the middle class is struggling,” Perry said.
Dealers need to think of themselves as wartime generals,” Perry said, acknowledging that he dislikes military metaphors. “But in this case, to be successful over the next five years, there’s no room for romantic notions about retail,” he said. Dealers need to apply a dose of “margin defense” to their business — offer a mix of products and service, not based on price, he said.
