The peloton is about to take on hundreds of dollars in taxes on its bike and treadmill, citing inflation
Peloton Interactive Inc. stationary bicycles are on display in the company’s showroom on Madison Avenue in New York, USA, on Wednesday 18 December 2019.
Jeenah Moon | Bloomberg | Getty pictures
Peloton is beginning to effectively start charging customers more for its original Bike and Tread products, citing rising inflation and rising supply chain costs.
As of Jan. 31[ads1], the company will ask customers to pay an additional $ 250 for delivery and setup for the bike, and an additional $ 350 for the tread, according to a banner on the website. This will bring the cost of these products up to $ 1,745 and $ 2,845 respectively.
Earlier, Peloton said that the fees of $ 250 and $ 350 for delivery and assembly were included in the total price of the bike and tread.
The price of Peloton’s newer Bike + product, at $ 2,495, will not change, according to the website.
In the UK, Germany and Australia, the Peloton has similar messages on its website that costs will increase from 31 January.
During a recent meeting between the company’s management, Peloton’s marketing and communications manager, Dara Treseder, said that the changes were due to rising inflation and higher expenses in the supply chain.
“Right now people are raising prices. Ikea has just raised prices. We want to go in the middle of the herd,” said Treseder, according to a recording of the meeting obtained by CNBC.
She added that the company did not want to be seen as making a “switch and bait” on customers.
A spokeswoman for Peloton told CNBC in an email: “Like many other businesses, Peloton is affected by global economic challenges and supply chain challenges that affect most, if not all, businesses worldwide.”
“Even with these increases, we believe we continue to offer the best value in connected fitness, offering consumers various financing options that make the Peloton available to a wide audience,” the spokeswoman said.
The $ 39.99 monthly subscription fee paid by online fitness users for on-demand content remains the same.
In August, the Peloton had cut the price of the cheaper Bike product by about 20% to $ 1,495, hoping to appeal to more consumers with a cheaper alternative.
After witnessing increasing demand from consumers looking for home exercise equipment in 2020, Peloton’s momentum has stalled considerably in recent months. The stock has also been hit. Shares fell around 76% in 2021, after rising more than 440% the year before.
In November, Peloton reduced its full-year outlook due to ongoing supply chain constraints and softer demand. Analysts have said that they expect the company to have had a weaker holiday, which could lead to a new cut in the annual guidance.
Last Thursday, Nasdaq said that Peloton’s share will be replaced by Old Dominion Freight in the Nasdaq 100 index, with effect from 24 January.
