Halfords UK Sees Cycling Sales Drop; IBDs Business Remains Strong
REDDITCH, UK – In last week’s trading update Halfords Group Plc announced that its cycling sales fell 11% in the eight-weeks that ended August 28, 2015. Halfords UK blames the rainy weather that spurred increased levels of discounting. However, the country’s retail association ACT reported that dealer sales grew by 26% during July and August.
Summer rainfall levels in the UK were about 13% more than the long-term average, the country’s Met Office said, keeping casual cyclists away from the roads. For Halfords, the impact was accentuated by comparison with a period of last year when cycling was encouraged by the Tour de France race coming through the UK for the first time since 2007.
First slowdown in two years
The slowdown in cycling sales is the first at Halfords since April 2013. Halfords controls about 20 percent of the GBP 1 billion (€ 1.375 bn) UK cycling market, according to financial analysts. The industry has grown rapidly in recent years due to the rising popularity of endurance cycling, especially among middle-aged men.
“This recent weakness in our cycling sales is disappointing, but it comes after two years of very strong growth in the category,” Chief Executive Officer Jill McDonald said in a statement. She added that it is, “A blip rather than a structural change in the market.” She joined Halfords in May from McDonald’s Corp., where she headed the restaurant chain’s UK operations. Outside of cycling, Halfords said business in all other areas remains ‘robust’. Car parts performed strongly, it said.
Demise of road bike sales
Industry observers noted that July 2015 experienced the hottest July day on record in the UK. And the Association of Cycle Traders (ACT) said that in comparison independent retail bicycle sales grew by 26% via the ACT Ride it away scheme during July and August.
The Association noted further that Halfords sold more high-end bikes in the past two months than a year earlier, but that prices came under pressure from reductions made by competitors. “No doubt a reference to the demise of road bike sales widely recognized throughout the specialist sector,” said ACT.