Following the financial year-end results for the UK’s biggest bicycle retailer, Halfords has told
BikeBiz that it is planning to grab market share in the premium, accessories and online sectors.
Last month the firm revealed that it had recorded a profit of £92.4 million before tax – a 2.4 per cent rise compared with last year, despite a like-for-like sales fall of 3.3 per cent.
“I think it’s widely known that there are opportunities to grow our cut of the premium market and our aim is to grow profitable market share in the high-end sector,” Halfords commercial director Paul McClenaghan told BikeBiz. “I think that’s where we’ll get our growth from in the future.”
McClenaghan also revealed how Halfords’ online portals were driving business, with accessories sales and the Reserve and Collect services performing particularly well for the retailer.
“What’s next for online is for us to add more variety to our accessories lines, which can also make use of the increasingly popular Reserve and Collect offering,” added McClenaghan.
“We currently range between 2,000 and 2,500 lines on the cycle accessories side and we’re planning to put another 2,000 on during the summer.
“We want to make sure we have a very credible offer on our website for cyclists,” McClenaghan concluded.
According to James Flower, senior consultant for Verdict Research, Halfords’ continuing success is another sign that the trade is faring well despite the recession.
But the effect on independent bike dealers of the huge retailer’s withdrawal from the Cycle Republic and Bikehut brands is less clear.
Flower told BikeBiz: “I don’t think this will have a major impact on independents. However, because Halfords will now not roll out numerous standalone stores, the prospects for independents going forward are improved. As ever, independents can prosper in the market, carving out a niche and building on service and specialist credentials.
“That said, Halfords is growing its premium cycle business quickly which means it will bump into some specialist independents more often – though it will take time for Halfords to build real credibility in this area where service, knowledge and expertise are critical.”
Flower speculated on the reasoning behind the major rebranding: “I think the shops just didn’t trade as strongly as expected.
“Perhaps the Bikehut brand didn’t have quite the credibility that Halfords thought – with some consumers maybe unaware of the Bikehut brand in-store at Halfords. Also, trading patterns differ in smaller High Street stores to those out-of-town and this may have also been a challenge for the retailer. It probably makes sense to offer an edited assortment in smaller Halfords branded stores, rather than limit a store to the sales of bikes only.”
MORE SPACE FOR CYCLING?
Flower cast doubt on the firm allocating more store space to cycling: “Halfords already dedicates large areas to cycling. But there is room in many of these to increase stock densities. The fact that it will not open any more standalone cycle stores means that if anything, new bike space will slow going forward.
“Space growth plans and the fact that Halfords has a strong brand in cycling means that it will add share.”
Watch out for our interview with Halford, which we’ll upload soon to our Interviews and Features section. Alternatively why not download the full magazine here, or take a look on Issuu here.