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Halfords: Without better infrastructure, bike shops will struggle

Company says profits dented by Brexit, but they're hopeful families will cycle on 'staycations'...

Halfords has warned that without better infrastructure, bike shops could fail to capitalise on underserved markets in the UK.

In its latest group statement it said that although there is potential for market growth, given that women in particular cycle far less than their European counterparts, safe bike lanes would make this far more likely.

According to BikeBiz, the company reported a small sales increase but a 10.5 per cent fall in pre-tax profits to £71.4m for the year to March.

It said although Brexit had weakened the pound, it was hopeful this might mean more ‘staycations’ where families camped and cycled.

"Much of our sales are in needs-based categories that are more resilient to macro-economic cycles and our discretionary categories, such as cycling, camping and travel solutions," said the statement, "and could benefit from an increase in the number of people choosing to stay at home rather than holidaying abroad; a trend that we observed in 2009."

It added that although it was optimistic, the company had concerns about the cycling landscape.

"The cycling market is highly fragmented," continued the Halfords statement. "There are over 2,500 bike shops in the UK, the majority of which are independents. The changing marketplace and growth in online is making it increasingly difficult for these independents to be competitive. Our research has identified that the number of bike shops has declined by nearly 10 percent over the last year."

Last month we reported how Halfords and Cycling UK have announced a three-year partnership through which they hope to get millions of people cycling more frequently. Free bike maintenance and cycling classes will be run through the spring and summer as part of the Big Bike Revival.

Paul Tuohy, Chief Executive at Cycling UK said: “This great new partnership with Halfords will really help Cycling UK to get more people cycling more often. With over 460 Halfords stores adding their support to that of our 67,000 members, we will help to get more Brits moving more often.”

The Government recently announced that it would invest £1m in the Big Bike Revival scheme as part of its £1.2bn cycling and walking investment strategy.

Tuohy added: “With the Government’s recent announcement of over one billion pounds of investment in walking and cycling showing real intent, Cycling UK and Halfords are proud to champion a similarly ambitious and achievable target to get over five and a half million people cycling more.”

Simon Irons, Halfords Group Cycling Director said: “For Halfords partnering with Cycling UK seemed like a natural fit, given we share many of the same aspirations. We’re really excited to work with Cycling UK to encourage people to cycle, at all levels and across all ages. We’re proud to make a commitment to giving participation in cycling across the UK a real boost.”

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17 comments

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barongreenback | 6 years ago
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Probably worth a reminder here that Halfords now have an expanding premium storefront in the form of Cycle Republic, which is where you will find the high end Boardmans as well as other brands and kit. 

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PaulCee52 replied to barongreenback | 6 years ago
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barongreenback wrote:

Probably worth a reminder here that Halfords now have an expanding premium storefront in the form of Cycle Republic, which is where you will find the high end Boardmans as well as other brands and kit. 

If my local branch of Cycle Rebublic is anything to go by, I can see why Halfords may find it a struggle - unknowledgable, unhelpful, poor stocks - I know it's not fair to judge a whole chain by one branch but, to be honest, I've found them better at the Halfords superstore!

Still prefer the couple of independents I use regularly though...

 

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barongreenback replied to PaulCee52 | 6 years ago
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PaulCee52 wrote:

barongreenback wrote:

Probably worth a reminder here that Halfords now have an expanding premium storefront in the form of Cycle Republic, which is where you will find the high end Boardmans as well as other brands and kit. 

If my local branch of Cycle Rebublic is anything to go by, I can see why Halfords may find it a struggle - unknowledgable, unhelpful, poor stocks - I know it's not fair to judge a whole chain by one branch but, to be honest, I've found them better at the Halfords superstore!

Still prefer the couple of independents I use regularly though...

 

 

As do I although when I recently bought a very expensive new bike, it was Evans who bent over backwards to help me whereas my local independent Trek dealer couldn't be bothered to answer the phone or return messages.  I think it largely comes down to individuals and store management rather than a specific chain. 

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Velovoyeur | 6 years ago
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The statement that the cycle market is fragmented is very true but, as the market evolves, there will be those that survive and those that fail.

With its immense buying power and distribution network, Halfords will be able to survive. There are loads of LBS that survive because of their self- belief that they are better than Halfords which, to some extent, is correct but they still operate on low volumes and tight margins. It will only take a conscious change in attitude from Halfords to raise staff pay (cycle products are specialist retail and require knowledgeable, skilled staff. It is not comparable to supermarket retail), poach some good buyers, employ some staff trainers and there will be a huge shift in their product offerings and service that would threaten lots of LBS. There are too many LBS that are fortunate that Halfords have not realised this. Likewise, Halfords are reluctant to invest fully in this market but, if they did, they could increase their market share.

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Velovoyeur | 6 years ago
1 like

The statement that the cycle market is fragmented is very true but, as the market evolves, there will be those that survive and those that fail.

With its immense buying power and distribution network, Halfords will be able to survive. There are loads of LBS that survive because of their self- belief that they are better than Halfords which, to some extent, is correct but they still operate on low volumes and tight margins. It will only take a conscious change in attitude from Halfords to raise staff pay (cycle products are specialist retail and require knowledgeable, skilled staff. It is not comparable to supermarket retail), poach some good buyers, employ some staff trainers and there will be a huge shift in their product offerings and service that would threaten lots of LBS. There are too many LBS that are fortunate that Halfords have not realised this. Likewise, Halfords are reluctant to invest fully in this market but, if they did, they could increase their market share.

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Kapelmuur | 6 years ago
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I think back 5 years or so to when I decided that I'd like to try road cycling to keep myself fit in retirement.

I went to my LBS and was, rather sniffily,  offered a machine for around £700 as their cheapest option, I also found the place intimidating with wiry guys in lycra leaning on the counter discussing the gear ratios they used to climb the Horseshoe Pass.

So I moved on to Halfords and bought a Carrerra TdF for £260 which served me well for a couple of years until I felt confident enough to return to the LBS - now wiry(ish) and lycra clad.

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Bob Wheeler CX | 6 years ago
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Who cares what they think, they mostly sell kids bikes and heavy low group-set stuff anyhow. The few decent bikes they have (Boardman) would be better off being sold directly by Chris online. Get them out of the hands of their clueless, arrogant staff.

The day Halfords close, I will clap my hands.

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TheHungryGhost | 6 years ago
1 like

Many years ago, I decided that I would start cycling to work. Went to Halfords and had a look, then to my local bike shop. As someone who at that time knew nothing about bikes, just went with the £100 Raleigh mountain bike from Halfords rather than the £500 cheapest bike from the LBS, after all they looked the same to me.

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Dr_Lex | 6 years ago
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There's also the C2W scheme involvement - my company is just offering it, having been asked to do so for ages, and the HR director preferred the simplicity of signing up to the Halfords offering.

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mike the bike | 6 years ago
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I've had a wide range of service from our local Halfords.  At the one end there's the 'mechanic' who thought every pedal has a right-hand thread and at the other there's the lovely guy who expertly trued my wheel and wouldn't charge for his ten minutes labour.  It's not all bad news and, as somebody just said, the Boardmans are wonderful.

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WillRod | 6 years ago
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Boardman bikes seem good, but Halfords no longer stock some of the nicer bikes they used to sell.

 

I went to my LBS because I could afford the marginal extra cost and would rather pay for knowledgeable staff. Perhaps I have just had a bad experience with my local Halfords (all 6 that I've tried).

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StraelGuy | 6 years ago
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Ratfink, just ask them to match their own web price. I do and they always agree.

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Ratfink | 6 years ago
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I pop into a halfords i pass every so often and buy the odd bits and pieces, I find it bizarre though that i can save money by walking outside the shop ordering what i've just seen inside the shop on my phone for click and collect and walk back into the shop and pick it up.

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keirik | 6 years ago
4 likes

tbh I havent seen Halfords undercutting anyone - let me know where they do it so I can take advantage  1

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brooksby | 6 years ago
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Are LBS struggling because monolithic organisations like Halfords can undercut them?

"Join us. Your retail distinctiveness will be added to our own. You will be assimilated."

 3

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muppetteer replied to brooksby | 6 years ago
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brooksby wrote:

Are LBS struggling because monolithic organisations like Halfords can undercut them?

"Join us. Your retail distinctiveness will be added to our own. You will be assimilated."

 3

 

I'm not sure you're aware of the the market which Halfords operates in? LBS definitely wouldn't want to deal with sub £100 mountain and constant complaints?

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brooksby replied to muppetteer | 6 years ago
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muppetteer wrote:

brooksby wrote:

Are LBS struggling because monolithic organisations like Halfords can undercut them?

"Join us. Your retail distinctiveness will be added to our own. You will be assimilated."

 3

 

I'm not sure you're aware of the the market which Halfords operates in? LBS definitely wouldn't want to deal with sub £100 mountain and constant complaints?

Yeah, I get that, but the average family guy who's just trying to get his kids a cheap bike, or himself a weekend runaround so he can be a MAMIL, doesn't. Average Joe goes to the nearest bike shop, and thinks a LBS looks a little bit *little* or even maybe iffy, you know? Unfortunately.

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