Bicycling is Booming in Britain

January 26, 2012

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Bicycling is Booming in Britain, Says London School of Economics

LONDON, UK – A 24-page report on the state of the ‘cycling economy’ and the prospects for the future has been released by an academic at the London School of Economics. The report – ‘The British Cycling Economy’ – was written by Dr Alexander Grous, a productivity and innovation specialist in the Centre of Economic Performance at LSE.

He has an interest in sports and sponsorship economics including how corporate participation in sports can foster social, economic and health benefits. His report was commissioned by Sky TV and British Cycling. Sky TV sponsors the Team GB cycling team and also organises Skyrides, mass participation city centre bike rides.

Dr Grous said: “Cycling in the UK has undergone a renaissance over the past five years, with an increasing number of people taking to the streets of the UK by bike. Structural, economic, social and health factors have caused a ‘shift in the sand’ in the UK, spurring an expansion in the cycling market with indications that this will be a longer-term trend. This growth in cycling participation has had the knock-on effect of bringing economic and social benefits to the UK. In 2010 the result was a gross cycling contribution to the UK economy of £2.9bn.”

Dr Grous set out to quantify the economic benefits generated by individual cyclists, taking into account factors including bicycle retail, and employment. He concluded that the ‘gross cycling product’ was £230 per cyclist, per annum.

“If this trend of growth in cycling participation continues, one million additional ‘Regular Cyclists’ could contribute £141m to the UK economy by 2013 whilst concurrently reducing absenteeism and improving the individual’s health, providing an incremental economic benefit,” said Dr Grous.

Some of the one million cyclists now nudged into the ‘Regular Cyclist’ category were encouraged to do so by events such as the Skyride city bike rides, said the LSE academic, who is a keen triathlete and cyclist.

The ‘British Cycling Economy’ paints a rosy picture of bicycle retail, claiming increased sales of 28 percent year on year in 2010 with sales of 3.7m bikes generating £1.62bn.

“The UK retail bicycle sector displays a high degree of polarisation with a small number of larger independent and corporate chains controlling a large proportion of the market. Around 2,000 stores operate across a spectrum of activities including sales, servicing, workshops, and other speciality areas,” said Dr Grous.

“Evans Cycles remains the UK’s largest independent cycle specialist with 43 dedicated cycling stores nationally, whilst Halfords controls over a third of the market in terms of sales, with over 1m bikes sold annually through 400 stores.”

The LSE academic believes the annual sales of cycle accessories is £853m. Over £500m generated in wages and £100m in taxes from 23,000 people employed directly in bicycle sales, distribution and the maintenance of cycling infrastructure.

However, the sales figures from Dr Grous are disputed by Carlton Reid, the executive editor of UK trade magazine BikeBiz:

“The report has been picked up by the mass media and some good PR has come out of it but the 28 percent year on year growth figure is wrong. The UK bike trade has been doing OK in the recession but such a stellar growth rate hasn’t been seen on the ground. And last year, like this year, there’s an awful lot of inventory sat in warehouses.

“Dr Grous was extrapolating from already unreliable statistics. The UK market has no reliable bicycle sales statistics. In that sort of vacuum it’s easy for mistaken market assumptions to be released and I’m surprised the London School of Economics didn’t put more caveats on their sales figure research.”

Click here to read the whole report: ‘The British Cycling Economy’…

Published @ 23-08-2011 Bike Europe Magazine