Are We Sleepwalking Into a Supermarket-Style Bike Industry here in Australia?
There’s an uncomfortable conversation the Australian cycling industry needs to have. The longer we avoid it, the harder it will be to undo the consequences.
Other retail sectors didn’t choose consolidation. They drifted into it. One buying decision at a time. One rebate agreement at a time. One “it’s just business” justification at a time.
If we’re honest, the bike industry is not immune, and many of the warning signs are already here.
What Consolidation Actually Looks Like (Once the Dust Settles)
When market power concentrates around a small number of very large retailers, the outcome is rarely more choice in the long run. It usually means:
- Fewer independent bike shops
- Fewer small-to-medium importers
- Fewer experimental or niche brands entering the market
- Less competition on anything other than price
The promise is convenience and discounts.
The reality, eventually, is uniformity.
That interesting overseas brand you saw reviewed online? No local distributor is willing to take the risk anymore.
That specialist touring setup you researched? Not ranged locally, but there are three “close enough” options you can choose from.
Need a replacement part for a five-year-old bike from a smaller brand? You’re ordering from overseas and hoping it clears customs.
This isn’t theory. It’s how consolidated retail ecosystems behave.
Independent Bike Shops are the Canary in the Coal Mine
Independent bike shop do the hardest and least scalable work in the industry:
- Educating new riders
- Supporting emerging brands
- Carrying slow-moving but important SKUs
- Building trust face-to-face, one rider at a time
They create demand before there’s volume. They build brands before they’re profitable.
When independents disappear, it’s not because they failed the industry, it’s often because the industry stopped valuing what they uniquely provide.
The Quiet Expansion of House Brands
Let’s talk about in-house and white-label brands. This model is well established in supermarkets, online marketplaces, and mass retail. It’s in it’s infancy here in Australia, but it’s widespread in most other countries and industries. It always follows a similar trajectory:
- Introduce a house brand at the low end
- Merchandise it beside established brands
- Gradually expand range and visibility
- Replace branded SKUs model by model
Over time, the incentives shift. Why promote an external brand when you can earn more margin on your own?
The result?
- Less investment in independent R&D
- Fewer genuinely new ideas reaching consumers
- A market that looks diverse, but isn’t
House brands don’t need to be better. They just need to be good enough, and always in stock.
Rebates: The Advantage No Independent Can Compete With
Now to the part we rarely talk about openly.
At a certain scale, large retailers begin negotiating back-end rebates, often on top of already discounted wholesale pricing. These rebates are typically paid retrospectively, tied to total annual spend.
From the supplier’s side, it can feel unavoidable:
“They’re too big not to supply.”
From the rest of the market’s perspective, it quietly breaks competition.
Large retailers gain:
- A lower effective cost base
- Pricing flexibility independents can’t match
- Margin headroom to discount aggressively when it suits them
Independent retailers are left competing against numbers they will never see on an invoice.
No laws need to be broken for this to reshape an industry, it happens entirely within the rules, and entirely outside the spirit of a level playing field. Our most famous duopoly here in Australia, Woolworths and Coles, use this playbook to squeeze our agriculture, dairy, and major food producers to the limit. It’s already widespread in the bike industry and some suppliers are already starting to feel the squeeze.
What Happens When a Supplier Becomes Dependent
Once a single customer represents a significant share of a supplier’s revenue, leverage shifts.
Options narrow.
Risk tolerance drops.
Innovation slows.
In extreme cases, the supplier becomes replaceable. Or redundant. They make a play with the manufacturer directly to cut out the supplier and purchase direct.
This is how industries lose:
- Family-run distributors
- Specialist importers
- Local jobs and expertise
Not through drama. Through dependency.
We’ve Seen This Movie Before
Retail history is full of examples where consolidation was initially celebrated, until the main streets emptied out and the choices vanished.
Short-term price competition gives way to long-term control.
Efficiency gives way to fragility.
Volume replaces diversity.
Once that tipping point is reached, it’s nearly impossible to unwind. We are all very familiar with the inflated price of groceries with only two major chains to choose from in almost every local community around Australia.
I’m aware of one area in WA that is completely dominated by one chain, and almost every bike shop in between has closed. The local community are left with so few choices that they are forced to drive long distances to access brands & products that are not part of the standard offering from the chain stores in their local area. We are not that far from something like this happening in Melbourne if we’re not careful.
A Direct Appeal To All Three Sides of the Industry
To Bike Industry Suppliers
If one or two customers account for most of your volume, you don’t have security, you have exposure.
Independent retailers may be smaller individually, but together they provide resilience, advocacy, brand-building and feedback loops that no single large account can replace. They help you understand trends, refine product, and build long-term loyalty.
Support your army of independents. They are your future market.
To Bicycle Retailers
Support the suppliers who support a balanced market. Buy their products, stock their brands.
Ask hard questions:
· Are rebates being paid to dominant online retailers?
· Are there alternative brands with fairer channel strategies?
· Are you supporting partners who invest in the whole ecosystem?
Choose partners whose growth strategy doesn’t rely on hollowing out the rest of the channel.
To Riders and Consumers
Convenience and price matter, but so does choice and service. Think about the implications of your spending and the power that it wields. Understand that with cheap prices and convenience, often long term and invisible changes are invited.
Every dollar spent locally helps keep expertise, variety and innovation alive and nearby. If those disappear, they won’t be replaced by algorithms.
Independent bike shops are where new riders start, where bikes get fixed, where problems are solved, where knowledge is passed on, and where community is built.
Support them where you can if you value their contribution.
This Isn’t Anti-Success. It’s Pro-Balance.
Big businesses succeeding isn’t the problem.
Markets tipping so far that no one else can survive is.
The Australian bike industry is slowly headed down this consolidation path with big corporate money, AI-driven price algorithms that drive pricing lower and lower, and complex financial engineering tools that most retailers can't access.
But it still has a chance to choose a different outcome, but only if we’re willing to talk honestly about where current incentives are leading us and most importantly; change our buying habits.
Silence and inaction are easy.
Rebuilding an industry after consolidation is not.
A Personal Perspective
I grew up in the United States in the 70s, 80s and 90s. It was exciting when big shopping centres opened in our small town. It was exciting when factories expanded and new retailers and restaurants arrived. We had vibrant small town main streets.
But today, many of those centres are empty.
The factories are gone.
Small specialty stores are rare.
Main streets are increasingly empty, "For Lease" signs are common
Most people buy everything online.
Now I live in Australia — and I love the vibrancy of its main streets. The cafes, the independents, the specialty shops. During COVID I watched “For Lease” signs take over Chapel Street and Centre Road. It was scary to see retail change so fast. It took years to recover.
I don’t want to see Australia repeat the same mistakes.
We still have something worth protecting.
