Tesco unveils dedicated 'Bike Shop' concept

Shops-within-shops in seven stores, and trained staff will put bikes together, too

by Simon_MacMichael   March 10, 2010  

Tesco Logo.jpg

Tesco, the UK’s biggest retailer, has set its sights on the bicycle sector, opening a ‘Bike Shop’ concept at a number of its stores, according to the trade website, BikeBiz.

Rumours that the supermarket giant had been considering such a move had been circulating for some time, and a Tesco spokesman has confirmed that it has opened Bike Shops at seven stores, including one in Chesterfield.

The retailer is also offering customers the option of having the bikes they buy built by trained staff, which BikeBiz believes is the first time such a service has been offered by a supermarket.

The provision of an assembly service does give Tesco a point of difference to its non-specialist competitors at the lower end of the market. Last year, the difficulty of self-assembly of flat-pack bikes from retailers including Asda, Tesco and Argos, and the dangers that can arise if they are put together incorrectly, were highlighted in a BBC Watchdog programme addressing the issue of so-called BSOs – bicycle-shaped objects.

A spokesman for Tesco told BikeBiz: “We launched Bike Shops in seven of our stores before Christmas. These stores had a specific area for bikes and offered the option to have the bike assembled. “

He continued, “They have been very popular with customers who have appreciated having trained experts to help them pick the right bike and assemble it. Our West Durrington store is the latest to open with a Bike Shop.”

It’s unclear at the moment which brands the dedicated Bike Shops sell – perhaps any road.cc readers in Chesterfield or West Durrington could enlighten us on that point – we’re guessing that it’s unlikely you’ll be able to pick up a Colnago with your corn flakes or a Bianchi with your baked beans any time soon. Raleigh has confirmed to BikeBiz that it was not involved with Tesco on the concept.

It’s likely though that he offer though will be pitched at the lower end of the mass market. Tesco’s largest ‘store’ in terms of the range of goods offered is its Tesco Direct website, which sells bicycles across two broad categories - City, Hybrid & Folding Bikes and Mountain Bikes – with price points below the £200 mark on all models other than an electric bike that sells for almost £600. Brands stocked are Emmelle, Flight, Flite, Meerkat, Terrain and Vittesse.

The supermarket operator told BikeBiz that it is keeping an eye the performance of the seven Bike Shops opened to date and that the concept may be rolled out to other stores, with its spokesman saying: “We will continue to monitor what our customers think about our Bike Shops and we will look to see where else we can introduce them.”

Commenting on Tesco’s development of the Bike Shop concept, retail expert Richard Perks of the consumer research consultancy Mintel told road.cc: “Tesco is a very astute retailer and it is not one to ignore a growing market. It has the space to retail bikes in its Tesco Extra stores and might be able to introduce them into other stores, if appropriate. It has some experience in the market already, but it'll be interesting to see how far it wants to go.”

He continued: “The classic supermarket strategy would be to cream the market - introduce ranges of bikes geared to the lower end of the market, make sure they are very price competitive (by buying in bulk) and aim for volume sales.”

Mr Perks believes that for now at least, Tesco’s efforts will be focused on the mass market. “It is hardly likely to want to get into higher specifications or servicing, at least not at this stage,” he explained. “That strategy might cause problems for many bike retailers, but it would probably also expand the market and lead to people wanting to trade up as well.”

10 user comments

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It's not so much the bikes on sale - the range will no doubt be full of loss-leaders and 'tesco value' models - its all about how deeply Tesco decides to go into the parts & accessories market.
When you can pick up '3 for 2' inner tubes, a tub of energy drink, a new track pump or a pair of shorts for the weekend along with the weekly shop, bike shops will lose out on the all-important passing trade and impulse buys.
Bike shops could end up being 'showrooms for Tesco', where people head for their LBS to get advice and try stuff on for size, then trot off and buy it at Tesco.

Tesco's unrivalled buying power will make it nigh-on impossible for bike shops to compete; the ball is in Tesco's court on this one. Can you see the wholesalers and distributors turning away a £50k order from Tesco to protect an LBS who spends £20 a month with them?

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posted by neilwheel [130 posts]
10th March 2010 - 11:04

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It seems Tesco are determined to be the ultimate 'one stop shop', grabbing market share through sheer size. They can then bully their suppliers because they dominate the marketplace.

Why can't they stick with selling processed food, washing powder, ciggies and magazines?

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posted by Simon E [1857 posts]
10th March 2010 - 13:59

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neilwheel wrote:
It's not so much the bikes on sale - the range will no doubt be full of loss-leaders and 'tesco value' models - its all about how deeply Tesco decides to go into the parts & accessories market.
When you can pick up '3 for 2' inner tubes, a tub of energy drink, a new track pump or a pair of shorts for the weekend along with the weekly shop, bike shops will lose out on the all-important passing trade and impulse buys.
Bike shops could end up being 'showrooms for Tesco', where people head for their LBS to get advice and try stuff on for size, then trot off and buy it at Tesco.

Tesco's unrivalled buying power will make it nigh-on impossible for bike shops to compete; the ball is in Tesco's court on this one. Can you see the wholesalers and distributors turning away a £50k order from Tesco to protect an LBS who spends £20 a month with them?

Isn't this already happening due to the online bike shops anyway. I spent £3k on bike stuff last year and not once did I go to a LBS as I knew exactly what I wanted and I'll buy it wherever I can get it cheapest. If Tesco can sell the same kit at a cheaper price then happy days. A LBS with staff that has a good knowledge base and polite, professional service will prosper as they always have done.

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posted by stuke [299 posts]
10th March 2010 - 15:30

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I rarely buy anything online. I go to shops when I need something because it is more convenient. The cost benefits of buying a bicycle online are more than wiped out when the first service is due. I've also been able to borrow tools and stuff from the shop where I bought my my first mountain bike over 20 years ago as the manager knows me. When my youngest son was desperate for the loo and we were nearby, the shop manager even let my boy use the staff toilet. Try doing that online!

OldRidgeback

posted by OldRidgeback [2098 posts]
10th March 2010 - 16:01

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stuke wrote:
I spent £3k on bike stuff last year ... If Tesco can sell the same kit at a cheaper price then happy days.

Laughing
If you reduced your budget to 300 quid you might be in luck

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posted by vorsprung [283 posts]
10th March 2010 - 16:16

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OldRidgeback wrote:
I rarely buy anything online. I go to shops when I need something because it is more convenient. The cost benefits of buying a bicycle online are more than wiped out when the first service is due. I've also been able to borrow tools and stuff from the shop where I bought my my first mountain bike over 20 years ago as the manager knows me. When my youngest son was desperate for the loo and we were nearby, the shop manager even let my boy use the staff toilet. Try doing that online!

It sounds like you have a good bike shop - not all are like that. My local shops offer pretty poor service and charge absurd amounts for any labour. I've therefore purchased 90% of my bike related stuff online and learnt to do the work myself (again with the help of the internet). There are plenty of small shops that survive and they do so by offering a good service and adapting - others will go the way of Woolies who I can't say are missed by me.

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posted by TheHatter [810 posts]
10th March 2010 - 21:19

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stuke wrote:

Isn't this already happening due to the online bike shops anyway. I spent £3k on bike stuff last year and not once did I go to a LBS as I knew exactly what I wanted and I'll buy it wherever I can get it cheapest. If Tesco can sell the same kit at a cheaper price then happy days. A LBS with staff that has a good knowledge base and polite, professional service will prosper as they always have done.

How is the LBS, (even with its polite knowledgeable staff) meant to prosper if their customers are spending £3K online that could have been spent with them?
How will they survive when the high-priced goods are bought online and the 'bread and butter' stuff gets chucked in a shopping trolley along with the bangers and beans and the rest of the weekly shop?
What's left for the LBS?
Any business without customers won't be a business for very long; bike shops aren't any different and could be feeling the same pressures all those local butchers, greengrocers, bakers and fishmongers felt when Tesco first came to town.
Where are the local shops now?

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posted by neilwheel [130 posts]
10th March 2010 - 22:00

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Hatter - Brixton Cycles is the local shop of preference and there are a few others too, including some of the Evans chain. Brixton Cycles is my first choice but I even buy stuff from the local Halfords, because it's convenient and isn't expensive.

OldRidgeback

posted by OldRidgeback [2098 posts]
10th March 2010 - 22:31

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neilwheel wrote:
stuke wrote:

Isn't this already happening due to the online bike shops anyway. I spent £3k on bike stuff last year and not once did I go to a LBS as I knew exactly what I wanted and I'll buy it wherever I can get it cheapest. If Tesco can sell the same kit at a cheaper price then happy days. A LBS with staff that has a good knowledge base and polite, professional service will prosper as they always have done.

How is the LBS, (even with its polite knowledgeable staff) meant to prosper if their customers are spending £3K online that could have been spent with them?
How will they survive when the high-priced goods are bought online and the 'bread and butter' stuff gets chucked in a shopping trolley along with the bangers and beans and the rest of the weekly shop?
What's left for the LBS?
Any business without customers won't be a business for very long; bike shops aren't any different and could be feeling the same pressures all those local butchers, greengrocers, bakers and fishmongers felt when Tesco first came to town.
Where are the local shops now?

The local shops selling good quality stuff are still there, whether its the supermarkets or the recession that they are up against. My point is the 3k I spent online would have probably been closer to 4k at my LBS. Luckily I have a mechanic who does all my servicing for free, if I didn't, I'd be using my local bike shop for that and I've always bought complete bikes from the shop as well.
business is business and i don't see why I should pay more for something in a local shop that I can get cheaper elsewhere.

Do you buy your elctrical goods from a local shop or Currys / Comet? Your fruit & veg from the local grocers, meat from the buthchers, bread from the bakers? if you do, fair play but I personally do not have the time to go trapsing round town to do my shopping when I can do it in one place.

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posted by stuke [299 posts]
11th March 2010 - 9:55

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OldRidgeback wrote:
Hatter - Brixton Cycles is the local shop of preference and there are a few others too, including some of the Evans chain. Brixton Cycles is my first choice but I even buy stuff from the local Halfords, because it's convenient and isn't expensive.

Good to know and when I've been in town I'd agree Evans is generally good. I have however has issues with some established shops. An example was when politely asking for a seatpost collar being met with a blank stare, followed by me pointing one out on a bike, followed by a deep sigh from the staff member who wandered off without a word before returning to say "no don't have 'em". Shops that offer this type of service will inevitably suffer when they get any competition.
On the other hand I'm sure if the Tesco near brixton starts selling bikes then Brixton Cycles will feel little impact in business.

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posted by TheHatter [810 posts]
12th March 2010 - 12:06

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