Halfords says new premium bike range is a hit – but cycling market remains challenging following “UK’s wettest spring since 1986”

After seeing its profits slashed last year amid “significantly worse than expected” bike sales, Halfords says its leisure cycling sector has remained a challenge throughout the first half of 2024, following the UK’s “wettest spring since 1986”.

However, in its trading update for the 26 weeks up to the end of September, the major retailer, the largest provider of cycling sales and services in the UK, said its performance cycling sector had “continued to outperform” and that its new premium bike range had been met with a positive reception from customers.

Halfords reported that its overall group like-for-like sales had remained “broadly flat” (down by 0.1 per cent) during the first half of 2024, compared to a strong performance the previous year, which had seen sales jump by 8.3 per cent.

Noting the UK’s wettest spring for 38 years, the company reported that its retail segment (which makes up 60 per cent of its overall group revenue, and cuts across both motoring and cycling) had seen sales fall by just 0.7 per cent.

While Halfords failed to detail how this flat performance was split across cycling and motoring, it did reveal that its motoring products – which represent 80 per cent of all sales across the company – “proved more resilient than expected”.

Leisure cycling, however, “remained challenging” the company said, “albeit with a positive reception for our new premium bike ranges”.

> "The premium sector is the fastest-growing part of the cycling market": Halfords to double the amount of bikes in its range priced over £1,000

Last month, Halfords announced plans to expand its premium bike range significantly, with the aim of more than doubling its high-end offerings.

The expansion includes the Carrera, Boardman, and Voodoo brands, with top-end models priced at £3,800, featuring components such as Shimano GRX Di2 and Zipp 303 S carbon wheels.

“The premium sector is the fastest-growing part of the cycling market – and one previously underrepresented at Halfords,” the company stated in September.

With this new range being received enthusiastically by customers, Halfords says its performance cycling products have “continued to outperform”, with online business Tredz increasing sales compared to last year.

Meanwhile, the company noted that “high levels of technician wage inflation persisted”, a factor that particularly pertains to Halfords’ motoring sector, but one which has also affected the bike industry in recent years.

Overall, the brand says its outlook for the year ahead remains “unchanged” and “uncertain”, but that its general Team Sky-esque “controlling the controllables” strategy is currently delivering to plan.

“Despite pockets of improving consumer sentiment, the short-term outlook remains uncertain, particularly for big ticket, discretionary purchases,” the report said.

“Our outlook for FY25 is unchanged. In the second half, our focus remains on optimising our market-leading platform in the face of continued wage inflation and end-market variability, positioning us for future growth. As such we are prioritising investment where we have high confidence in strong near-term returns.”

> Cycling market "significantly worse than expected", Halfords warns — with "high-profile failure of Wiggle" and widespread sales evidence of "another year of decline"

Reflecting on his company’s latest financial report, Halfords CEO Graham Stapleton commented: “While consumers remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming Autumn Budget, we have continued to focus on controlling the controllables and I am pleased with our performance in the first half of FY25.

“Our services and B2B-led strategy has supported Halfords’ growth despite two of our core markets remaining significantly below pre-Covid levels, enabling us to absorb more than £130m of inflation since FY20 while maintaining a strong balance sheet.

“In this environment we are focused on optimising the existing platform to drive near-term returns, while accelerating our investment in the Fusion concept to position us for growth in the coming years.”

In June, Stapleton conceded that cycling sales were expected to slump further over the next 12 months, but concluded that given the company’s profitability during a time of significant headwinds the business is “well positioned for profitable growth” in the future.

Halfords also pointed to the cycling industry continuing to “consolidate quickly” – a reference to Wiggle being bought by Mike Ashley's Frasers Group, the retail group that already owns Evans Cycles and Sports Direct – as another reason why the cycling industry has become “more challenging and competitive” in recent months.