Peloton Slows Production of Bike and Tread Products Amid Falling Demand

Peloton Slows Production of Bike and Tread Products Amid Falling Demand


Peloton, a company that saw soaring profits throughout 2020 and 2021, is reportedly slowing its production of treadmills and exercise bikes. The company offers high-tech exercise equipment that incorporates internet connectivity to allow users to access live workout coaches. Peloton enjoyed a surge of new customers in 2020 as gyms closed their doors and people transitioned to working from home.

Reports indicate that Peloton is suspending production of its Bike for two months. Meanwhile, it will pause manufacturing on the Tread for six weeks. These production slowdowns are the result of falling demand in the first weeks of 2022 as customers return to gyms and the novelty of Peloton’s devices wears off.

What Slowed Down Demand?

Peloton has blamed the slower demand on customer “price sensitivity” and increased competition from similar home workout products. The Peloton Tread retails for $2,500, while the Bike costs $1,500. Worsening inflation and skyrocketing consumer goods prices have made these items tougher sells in the current market. 

In short, Peloton seems to have overestimated demand for its high-priced products. Thousands of unsold devices are now sitting in warehouses, taking up valuable floor space and eating into the company’s shipping overhead. 

Costs Skyrocket

The slowdown in demand couldn’t come at a worse time for Peloton. Shipping costs are higher than ever as the global logistics industry struggles to clear bottlenecks at ports and in warehouses. Peloton’s products are heavy and bulky, making them expensive to ship. The company is reportedly exploring ways to cut its costs as customers slow their spending. 

Experts expect Peloton to begin closing retail locations and laying off employees to shore up its balance sheet in 2022. Meanwhile, the new Peloton Guide has been delayed to February, and might be delayed again into April.

Peloton Guide

The Peloton Guide is an upcoming fitness product that will use cameras and machine learning to scan users’ workout routines. As users progress, the system will offer tips for improving their results and will match them against trained instructors’ moves. 

Peloton announced the Guide in 2021 and originally planned to release the system by October of that year. Now, it might release as late as April of 2022. Meanwhile, the company will publish its quarterly performance on February 8, which will shed light on its sales figures for the final months of 2021. 

Spoiler alert: it sounds like gym memberships are here to stay, despite what tech enthusiasts predicted in March of 2020.