Halfords have reported a 5.9% increase in cycling revenue for the 14 week period to 3 January, putting the car products and bike retailer on track to meet profit forecasts. Sales across electric bikes and scooters were up 96% year-on-year for that quarter, with one in five adult bikes sold through Halfords now electric.
Halfords say: “Our work to optimise the cycling space in our retail stores together with a more innovative and differentiated range has created a better shopping experience for our customers during the peak holiday period. This in turn has delivered strong sales growth as well as better margins.”
Retail motoring sales were down -2.7%, with a milder winter not helping to shift sales of its traditional winter car care products. Meanwhile overall Group revenue was up 4.6%, with a 27% increase in online sales.
Whilst acknowledging that overall “market conditions remained subdued”, Graham Stapleton, Chief Executive Officer, commented: “Cycling performed particularly well… Approximately 85% of our bike range is unique to Halfords… In addition, our ability to provide customers with a unique, free, build and storage offer was met with strong demand, as we built 86,000 bikes in the week before Christmas.”
Stapleton has spoken of customers’ efforts to be more environmentally aware, saying: “Customers are responding to what they’re seeing on climate. ‘There’s just no doubt that electric is now here – it’s no longer an emergent small trend. It’s becoming a very significant part of our business in both cars and bikes.’”
Halfords’ 2019 annual report highlights the importance of becoming more service-focused to achieve continued growth, including improved e-bike and electric vehicle servicing. The company say long term market trends offer ‘good growth prospects’ in the cycling market; healthier living, ‘greener’ travel and cyclists willing to spend more on cycles and accessory upgrades.
The latest trading update follows a bumpier ride earlier in 2019, when Halfords reported falling pre-tax profits due to “consumers delaying big-ticket discretionary purchases, reflecting the current economic and political uncertainty.