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news
halfords-store-frontHalfords says cycling market is down 20 per cent year on year
Halfords, the UK’s largest retailer of bicycles and accessories, says that the cycling market is down 20 per cent year on year, with the cost-of-living crisis resulting in a fall in high-ticket, discretionary purchases by consumers – an area in which it sees little prospect of a recovery in the short term.
The company’s view of how the market is performing was revealed in a trading statement to the London Stock Exchange this morning, covering the 13 weeks to 30 December 2022, the third quarter of its 2022/23 financial year, and including the key Christmas trading period.
Besides providing the usual year-on-year trading comparisons, Halfords also revealed how its recent trading performance compared to the 2019/20 financial year, which it said would “provide a better understanding of underlying performance” by removing the impact of the coronavirus pandemic.
At group level, total revenue growth in the third quarter of 2022/23 was up 38.3 per cent compared to 2019/20, and by 12.6 per cent on a like-for-like basis, which strips out the impact of changes in the store portfolio.
Growth was largely due to a particularly strong performance within the company’s Autocentres and, to a lesser extent, motoring retail, with needs-based categories performing better than discretionary ones.
However, total cycling revenue fell 10.5 per cent during the quarter compared to three years earlier, and on a like-for-like basis was near-static with a fall of 0.1 per cent.
Within cycling, the company – which enjoyed booming sales of bikes during the pandemic – said that its overall revenues were “outperforming the market, however the market remains 20 per cent down year-on-year to date.”
It said that children’s bikes had “performed well due to the stronger year-on-year availability and Christmas gifting demand,” resulting in revenue growth of 4.6 per cent compared to the previous year.
But revenue from sales of adult bikes was “weaker than expected down,” falling 12 per cent year-on-year, which Halfords said reflected “the impact of weaker consumer backdrop” compared to the first half of the year, “and the more discretionary, higher ticket nature of the category.”
However, the company added that revenue from bikes sold through its Cycle2Work scheme “continues to show resilience against economic backdrop,” with a 20.1 per cent rise recorded against the previous year.
Halfords said that it would give more detailed guidance at the end of March to City analysts on its expectations for the 2023/24 financial year and beyond, saying that currently, “it remains particularly difficult forecasting with any certainty.”
While expressing confidence over its longer-term outlook, it added that “consumers will, however, continue to face inflation, and we therefore do not expect a significant short-term recovery in high ticket, discretionary spending.”
The company’s CEO, Graham Stapleton, said: “We have seen strong revenue growth in what are exceptionally challenging circumstances, and we have continued to grow our market share whilst also tightly managing our costs, inventories and cashflows.
“Consumer demand for our services and needs-based categories, which now account for the majority of our revenue, continues to grow, and our Motoring Loyalty Club is exceeding expectations as customers recognise the value of its unrivalled discounts and offers.”
He warned that Halfords was suffering from a skills shortage within its car-servicing business, and was to recruit and train technical staff to address that shortfall.
But with the company’s profit expectations for the year, previously cut from £75 million to £60 million, reduced further to £50 million today, Halfords’ shares fell by 20 per cent as the market responded to the weaker-than-expected trading update.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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37 comments
Branded stuff can be worth a look at in Halfords if you have discount from something like British Cycling. I got my brompton via them as that gave me 10% off, plus I could turn some rewards from work into Halfords vouchers.
Parts too, sometimes they can be really cheap. I think becasue they cock things up, so checking their website is worthwhile. New Shimano 601 chain they were £23.87, but at the till it rung up as £34.99. Showed them there own website and they pricematched themselves to the £23.87
There's bad and good about Halfords. In the bad at Blackpool Halfords, they sold what seems to be an excellent folder with duff tyres. They wanted me to take the bike back and wait a couple of weeks for them to replace the bulging rear tyre. Eventually they relented and I went back and received the tyres they were presumably going to fit. They were the wrong size. It went on for a while.
The good was at the Lancaster branch. I collected a Boardman bike for an aged (11 years more than me!) friend. It was well set up and is excellent- it has given me little trouble in the 2 1/2 years since.
Probably because Halfords is the worst company to buy a bike from in the UK?
Last one i bought (2020) developed a fault after less than 2 months. Halfords then had it for repairs for over 6 months, and within 3 days of getting it back i had to take it to my local bike shop as it wasn't road legal (Chain kept slipping off. Deraileur was wrong for bike or something, and it was dangerous to use on roads). Halfords refused to refund when they first had it for repairs, and again when i had to pay to make it road legal after their 6 months of "repairs".
Idiocy during the 6 months of "repairs" includes them calling me to tell my bike was ready TWICE, when neither times it was - resulting in wasted journeys. Then when it finally was ready they never bothered telling me - I had called by chance to see why they'd had it so long.
Probably the worst was when i took it in for the repair and the staff member who took it told me it was the worst E-bike they sell:
A. It's not bloody cheap.
B. If true, that's very unprofessional to even say to the customer.
C. Don't sell it, and refund me on mine.
He also told me anything over 3 miles a day on it was "extreme". 3 miles is nothing, and i cover 9 miles a day on my much cheaper work bike, so that's absurd.
EDIT: Forgot to mention that they first tried to book it in for repairs at the Oldbury branch, only for me to ask why they would book it in for repair there when the bike department in Oldbury Halfords is closed. "Oh, yes, it is". They seem to be idiots from top to bottom of Halfords.
Three miles a day is extreme? Wow - I am seriously hardcore, and I didn't even know it...
I cover 9 a day just getting to and from work, and don't break a sweat most of the time.
Door to door for me is about six miles, so I do twelve miles before I start thinking about riding down into the city centre at lunchtime, or going out of town to buy dog food, taking the 'scenic' route home, &c &c. I'm Halfords Hardcore, me
Evans are not much better. When I got back cycling I bought a cannondale quick from them and took them up on their service offer.
The bike came back with a new chain for some reason after not covering that many miles, a complete inability to change into the lowest three gears and with a loose stem bolt. I got my money back and haven't bought from them since.
I have since got my head round doing many things myself and thankfully found a brilliant, tiny independant bike shop only a few miles away.
I never knew Halfords sold high value bikes? I thought they only sold shite, badly assembled shite, put together by useless disinterested youths?
6 months ago in the quoted article when Halfords issued their FY22 prelim results, I warned "...wait to see what their end of year results would show on why Halfords might be more motorist focussed thesedays again."
these are not surprise results if youve been paying attention.
The link near the start of this article appears to take you to last year's Q3 statement. This year's can be found here: https://www.halfordscompany.com/investors/rns/rns-announcements/4227955
INteresting.
Had a chat to a staff at my LBS the other day, and he said they were reasonably busy.
But observed cycling round here has ticked up - though probably 1.5% to 2% or similar.
Aye the market has slowed.... I'm mainly the workshop side of things....as the margins are better... however many customers are leaving service/repairs longer, which in turn...often means a larger ticket at that time rather than a usual service fee.... more worn out parts and more cost instead, false economy. I'm pretty okay service wise workload, pretty much as usual and with a few of last years entrants to cycling (Gravel mainly) needing new tyres etc and some upgrading to tubeless etc.... Our local Halfords hasn't a bike tech(only one who visits) so I do get some of their "C" and "A" brand bikes in for those who will not wait for the visiting bike tech to work on their bike. - Ride Safe
Isn't this only to be expected after the pandemic? I know they are comparing the current figures with the pre-pandemic figures to get a more accurate picture for a "normal" year but surely the fact that with sales doubling during the pandemic there is bound to be a downturn compared to a pre-pandemic year simply on the basis that most people who wanted a bike will now have one?
Yep - and for the follow up stuff (servicing/repairs etc) hopefully people have now discovered the LBS!
Yes, hopefully – as my sadly now departed (as in shop had to close) local bike shop owner used to say, there's only one thing worse than buying a bike from Halfords, and that's letting Halfords set it up for you and do the servicing.
My friends shop gets quite a few people coming in with their bikes bought online, delivered and not built properly. When they cotact the online store, they get told to take the bike to a local bike shop. Some people expect the LBS to repair the bikes for free, because it's a new bike, regardless that they didn't buy it there. It's a pity these people don't buy their bike from a local bike shop, where they can get the bike they want, which fits them, and built correctly rather than buying from somewhere who doesn't give a shit what they sell you. They knock the arse out of the price, which ruins it for everyone in the business. Once your LBS has gone, it's gone, so use it.
Ymmv but I usually find LBS a deeply frustrating & patronising customer experience, and very cliquey to boot, hence most bits I need get bought online and I do most bar the really awkward servicing myself.
I'm not saying Halfords are better, but LBS arent all these saintly corners of bikedom they are made out to be.
I agree some shops can be like that, there's one near me that seems to exist purely so that the owner can sit around drinking coffee and talking bikes with his mates. The problem is that some people end up running a bike shop to feed their hobby, and have absolutely no training or experience in business or customer service.
What I'm seeing now is that LBS businesses seem to be going in a different direction. The current best shop near me, opened last year and doesn't sell bikes at all. It's purely service with a combination of fixed price service bands or an hourly rate, plus parts. They're happy to fit parts that customers have bought elsewhere, and on their pricelist have a line "Setup bike bought online £100"; there's no need for £100k stock sat on the shop floor only to find the distributor starts dumping the same models via Wiggle 6 months later for less than the shop paid for it. Although I also do most of my own servicing, I go there for odd bits & pieces where it's not worth me having the tool required or I feel they can do it better, it's not expensive and I think "use 'em or lose 'em"
Finally, it's not just bike shops historically that have been snooty or patronising - who remembers this?
https://youtu.be/DvswW6M7bMo
Spot on!
There's one near me that I don't use anymore since I popped in at the end of a ride in full kit pushing my somewhat flash road bike (700c wheels) to pick up a couple of mountain bike tyres (26x1.75) and the snooty assistant looked at my bike and said, "Are you going to put them on that? Because they won't fit on that, you know." It's a matter of lasting regret that I didn't say, "Oh, how silly of me" and walk out without giving them my money.
Does its name begin with E?
It does indeed!
And ends in s...
That was also my LBS for many years. I'm an an infrequent customer to any bike shop anyway but on the rare occasions I needed one, they rarely impressed with their approach to customer service.
I did actually go in there the week before last because it's within walking distance and I urgently needed a Hollowtech bottom bracket remover tool (having mislaid mine), they looked at me as if I was asking for a gold plated unicorn horn – clearly their ideal customer is someone who spends £5000 on a bike and then comes back every time they get a flat.
You obviously haven't found a good one. I only use Paul Hewitt Cycles in Leyland. Paul is a professional, knows his stuff, has the best equipped workshop I have ever seen, and is one of the best wheelbuilders in the UK. Nothing is too much trouble for him. Regarding bike sales, he will only sell you a bike which is right for you, and not sell you a bike he wants to shift on. Hence why many professional and olympic champions have used Paul for wheels, bikes and other stuff.
well no, but then theres very little choice around my part of the country, we dont have that kind of ingrained northern cycling culture, or the shop on every street corner feel of London or the south coast that results in a strong set of LBS competing to be the best.
you get shops that have generally been around for a long while, who are often very pally with their club riding mates, and whose focus is selling new bikes, certainly treating servicing as a sideline purely to keep a mechanic around who can put new builds together.
as a result theyre not very new customer focussed, and can be quite intimidating as places, as you always feel like you are being judged like that NTNON sketch
I actually tried an experiment once with one shop, Ive got some pro cycling team leisure/off the bike gear thats got all the proper sponsors logos and stuff on it, so I wore that when I went to pick my bike up after a service, and their attitude was totally different, couldnt have been more helpful when they thought I was someone from a pro cycling team and not just some muggle with a bicycle
Actually one problem with pretty much all LBSs is that in most cases they stock a very limited number of brands. So if you're the sort of person (like me) who would do careful research before settling on a very particular shortlist of potential bikes, the chances are you can't get any of them from your LBS.
Always worth checking if they can help you though, if you want to support your LBS: last year a friend went to his local shop and said I want this bike in this size (one they didn't stock), I can get it online for £xxxx, if you can order it with enough retailer's discount for you to make a profit selling it to me at that price I'll buy from you instead – and they did.
The issue is, many bike brands are now dealing direct with the customer, and cutting out the LBS. Years ago, Boardman, the top Boardman range, not the ones sold at Halfords, decided to sack off all their dealers and sell direct. I don't think that has gone too well regarding sales. Canyon only sell direct to the customer. Many more are going the same way.
This may sound good to some people, but remember the customer is responsible for sizing the bike, and assembling the bike if only a frame is purchased. Any issues with the assembly can lead you into a situation where anything wrong with the frame means that if the manufacturer admits liability, it is down to you to ship back to them, with Canyon I think it is Germany. Whereas with a reputable LBS, you can book a slot, have a bike fit, and the dealer will order the correct size and assemble it professionally so it is set up ready for you to ride without having to make any adjustments. Yes, it will cost more but remember, the dealer is in business to make a profit. The extensive workshop tools, lighting, heating and staff etc need to be paid for.
I may be old school, but I will happily pay a premium price to deal with a local business, and get the job done in a proper, professional manner. And be safe in the knowledge that if anything goes wrong, the shop is a ten minute drive away, rather than sending an email to a faceless business and waiting days for a reply, then having to package up and ship the bike back.
Independant bike shops can only stock a limited amount of stock. They have to stock a certin amount in order to be a dealer, they have to pay for them before they sell them, then another business can pop up online, without the overheads of a shop, and sell the same bikes for less than the bike shop can buy them for. The manufacturers should put a stop to this, but then they would be accused of price fixing.
The bike shops can't have hundreds of bikes in stock, they couldn't possibly have that much money tied up in bikes.
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