Halfords, the UK’s biggest bike retailer, has said that the downturn in the UK retail cycling market is worse than it expected, but adds that while its sales in the segment have fallen during the first half of its current financial year, it is performing better than its competitors. Meanwhile, Crawley, West Sussex-based independent bike shop chain Balfe’s Bikes has published its latest full-year financial results, posting a loss for the year to end-March 2023.
In its interim results announcement to the City yesterday covering the 26 weeks to 29 September 2023, Halfords’ chief executive officer Graham Stapleton said that while like-for-like [LFL] sales, which strip out the effect of stores opened and closed during the year as well as other changes to trading space, had fallen by 2.8 per cent, the business outperformed the market, which it said had seen a decline of 5.8 per cent.
“Given the more discretionary nature of this category coupled with the unfavourable weather conditions over the summer, cycling continues to underperform our other product categories,” Stapleton said.
He singled out the group’s performance within the Cycle2Work scheme as being “very resilient, with sales up 15.0 per cent year-on-year,” with Halfords the largest provider of bikes under the initiative, and also highlighted “double digit LFL sales growth” at online business Tredz, which he said had increased its market share “at a time of significant consolidation within the cycling market.”
Total sales within the cycling segment for the period stood at £192.3 million, down 3.1 per cent year on year, but Halfords said that it had grown market share during a period in which the retail market for cycling in the UK has been in turmoil – as we’ve previously reported, online business Wiggle Chain Reaction, which recently entered administration, is the highest profile casualty and a number of smaller businesses have also ceased operations.
Given its size and strength in the market, Halfords is something of a bellwether for the performance of the UK cycling retail sector as a whole, which following the boom brought about by the coronavirus pandemic has seen sales fall back sharply, with the cost-of-living crisis also leading to consumers reining in their spend on non-essential purchases.
As part of its ongoing strategic review of its operations, Halfords has said that it is focusing more on the motoring side of the business, which saw like-for-like sales rise by 8.2 per cent during the period, and now accounts for 62.8 per cent of its retail sales mix, compared to 37.5 per cent for cycling.
That strong performance in motoring helped group sales rise 13.9 per cent per cent to £873.5 million during the six month period, with pre-tax profit up 3.3 per cent to £19.3 million.
Meanwhile Balfe’s Bikes, which trades from a dozen shops across London and the south east of England, saw its sales fall by 10.5 per cent to £26 million in the year to 31 March 2023 according to its latest accounts, filed this week at Companies House.
IThe business posted a pre-tax loss of £1.5 million against profit of £116,000 during the previous 12 months.
Commenting on the accounts, the company said: “The cycle industry has seen significant turbulence during and post the covid pandemic period, initially with a significant increase in demand for cycling during the lockdown periods and post with demand falling back significantly to lower than pre pandemic levels.
“These changes in demand have caused significant disruption to the supply chain with large overstocks seen globally across the cycle industry during this financial year.”
Balfe’s Bikes said that it had “sought to mitigate some of these impacts by reducing its cost base and enhancing focus to areas of the market which have seen better performance, including bicycle servicing, sales of electric bikes and by expanding the range of parts, accessories and clothing stocked to support existing cyclists.”
It added that “there are early indications of some success,” with “sales and profit” for the current financial year to end-March 2024 being ahead of the preceding 12-month period.
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.