While cycling retailing giant Halfords’ revenues were up in the third quarter of 2023, the lingering turmoil in the bike industry meant that its performance in the cycling market was down by 1.2 per cent, which the company has labelled as “signifcantly worse than anticipated”.
In the Q3 trading update posted by the retailer yesterday, Halfords revealed that it is continuing with its “strategic shift towards service-related revenues, focused on motoring”, which the company announced in September last year to fill the void left by the cycling market’s downturn.
However, Halfords has continued to increase its cycling market share, in a time when many retailing mainstays for British cyclists have suffered and been forced to go under, including the widely popular Wiggle/Chain Reaction, as well as the Livingstone-based 2pure and Huddersfield-based FLi Distribution.
> Cycling sales down at Halfords as retailer shifts focus to car repairs
The company said that cycling market volumes were down by 5.1 per cent in the third quarter, that is 28 per cent below the pre-pandemic levels.
On the positive side, Halfords noted that the 1.2 per cent decrease in cycling retail was still an improvement on the first half of 2023, and reflected continued share gains in a market that was down on a volume basis as compared to the prior year.
This was facilitated by the strong performance in the sales of kids’ bikes, which went up by five per cent in December. Tredz, acquired by Halfords alongside Wheelies in 2016 for a sum of £18.4 million, also took significant share in the market, with an increase of 20 per cent in the quarter versus FY23.
In June last year, Halfords’ chief executive had claimed that they were “very, very confident” about the cycling market, owing to the growing awareness about climate change and the growth of electric bikes, despite suffering a 55 per cent fall in its annual pre-tax profits.
But the company has now declared that even though its revenues have increased by a bit, aided by the motoring retail and its automobile services, the cycling market performed significantly worse than anticipated and have weakened in Q3.
Graham Stapleton, Chief Executive Officer, said: “In what remains a very challenging time for our customers, we are pleased to have delivered a resilient performance in Q3. Against the current backdrop, our continued strategic shift towards needs-based and motoring service-related revenues has never been more relevant.”
The news comes 20 months after Halfords first noted a “considerable softening of the cycling market”, impacted by supply chain issues, inflation hitting customers’ spending and a return to more normal demand following the Covid bike boom.
In other news, Bike Europe has reported that listed bicycle companies exceeded expectations in 2023, with 18 of the 42 listed companies members ending 2023 with share value increases and 24 with decreases. The biggest growth was generated by Australia’s global bicycle marketplace BikeExchange with an increase of 510 per cent, while the biggest loss is reported by German e-commerce bicycle retailer Bike24, which went down by 60 per cent.
> What the hell is going on in the bike industry? Wiggle Chain Reaction turmoil discussed
10 thoughts on “Halfords’ cycling revenue falls owing to “significantly worse than anticipated” bike market, as it continues shift towards motoring services”
It’ll be interesting to see
It’ll be interesting to see how this plays out. The numbers quoted to me suggest Halfords are doing well in a shrinking market. That market shrinkage is likely still a consequence of increased sales during Covid so I would expect them to recover.
whether Halfords are ready to benefit from that recovery will depend on this prioritisation of motoring. That is moving towards electric vehicles. To me that would be more of a concern to Halfords revenue than the changes in cycling.
There is still a vast number
There is still a vast number of fossil fuel cars in use today. At the end of 2022 there were 40.7 million licensed vehicles in the UK. Plug-in EVs represent 2.8% of the total, and a fair few of those are hybrid models. 2,178,000 new vehicles were registered during that year. 75% of those were cars. [gov.uk]
Sunak has pushed back the date for an end to the sale of new diesel and petrol vehicles to 2035. That’s another 11 years of selling new fossil fuel cars in addition to all the ones currently in use. A new Nissan Leaf is currently from £27,290 to buy. You could lease one for £335 per month to if you want to be properly milked.
Sunak’s desperate attempt to get car-brain votes with his ‘Plan for motorists’ bollocks – meaning that everyone else can f**k right off and the environment can burn – is not going to help people switch to alternatives. Refusing to reverse the apparently ‘temporary’ 5p cut in fuel duty is effectively costing the Exchequer a big dollop of money every second of every day but sends the right message to those voters who fill up at the pumps.
With such clear signals from central government, councils will continue to put drivers first and foremost, leaving next to nothing in the budget for anyone else to get from A to B. And they shouldn’t be allowed to let people enjoy LTNs, 20mph limits and car-free town centres.
Retailers like Halfords will see all this and decide that, since car drivers spend far more than most cyclists, they need to be in that market. They will want to justify the infrastructure they have built – workshops, the ‘we fit’ service, ownership of Autotyres etc etc. And in the end Halfords has always been primarly a motoring-related business and IME their shops are based in driver-friendly retail parks. So why cater for cyclists, many of whom have had a negative experience with the quality of Halfords’ mechanics.
28% down on pre-pandemic
28% down on pre-pandemic levels. But at least they’re gaining market share as Wiggle/Chain Reaction have left a gaping hole. At least there’s no outside factors causing the economic downturn, just people choosing to spend their dosh elsewhere.
28% drop is supposedly base
28% drop is supposedly base on pre Covid levels though, so unless their regular customers stocked up during the pandemic, they’ve lost nearly 1/3rd somewhere in 4years
Krislord wrote:
I’ve always had the impression that Halfords’ car services are heavily based on quick replacements of peripherals like tyres, windscreen wiper blades, lightbulbs et cetera, all things that electric cars will need doing as well?
How much advertising do you
How much advertising do you see on TV for bicycles vs cars? Can’t even remember seeing one since Noel Edmunds did one for Raleigh. How much advertising revenue do the daily rags get from the cycle industry versus the Oil & Motor Industry? Does the fact that Sunak’s wife’s family own Infosys and have a £2bn deal with BP influence his decisions regarding Oil and Motors? (Offshore oil licences, ‘on the side of motorists’, push out the adoption of EV by 5yrs, etc.)
People buy a bicycle, and due to lack of use or lower priority don’t buy another for many years. Bikes used to be well under £1k for decent quality, now they cost as much as good used car.
No suprise the market is declining.
You do get them, but very
You do get them, but very targeted, you need to be watching the TdF live or one of the event highlight shows on ITV 4 or Quest.
Used to spend loads @
Used to spend loads @ Halfords on bike stuff. That was when BC discount was 10% and you could use it for online purchases.Also you could use it against products that were already discounted or in a flash sale,so you could get some bargains. Not anymore,sadly.
Their Range of bicycle parts and accessories is also now worse than ever and BC discount is now only 8% and can’t use it online.
It’s a long fall for the
It’s a long fall for the company that was so instrumental in bringing affortable, quality bikes to the high-street with Boardman (althiugh they did also sell Kirk’s magnesium monstrosities back in the day!)
How many bikes do people need
How many bikes do people need? I’ve got 4 and only really use 2 of them. Once most people have bought their bike that’s that apart from chains and tyre type purchases and some clothing.
All the casuals have bought their bikes.