ANALYSIS: Halfords reports on a disappointing summer for bike sales

We delve a bit deeper into the latest financials from the nationwide cycle retailer
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The latest financials from Halfords have helped build up a picture of a - relatively - disappointing summer for the bike trade.

The Q2 sales data, covering 4th July to 28th August 2015, saw cycling decrease "against tough comparatives" and as such are "below current market expectations in the quarter".

Anecdotal evidence from the rest of the trade perhaps provides detail to the wording Halfords has used here. Several bike traders have told BikeBiz that 2014 was a very strong sales year, perhaps buoyed by a perfect storm of the Yorkshire (Cambs and London) Grand Depart and the initial stages of the Giro d'Italia in Northern Ireland and Eire. Inflated expectations may well have been that 2015 would go on to exceed 2014 levels, though it would appear that reality has thwarted those predictions.*

Halfords' new chief exec Jill McDonald added weight to that perspective: "This recent weakness in our Cycling sales is disappointing, but it comes after two years of very strong growth in the category and has been partly offset by strong growth in both Car Maintenance and Car Enhancement sales, which is a testament to the balanced nature of the business."

Our off-the-cuff straw poll found that our bike shop readers had seen the trend too, with 32 per cent stating sales were significantly down on last year.

Halfords saw an 11 per cent like-for-like revenue fall in cycling in Q2. cycle repair like-for-like remained strong at +27.6 per cent, which may make for uncomfortable reading for the many IBDs relying on servicing for revenue - or may indicate that new bike sales have declined in favour of maintaining existing bikes.

Halfords blamed not just the weather deterring casual cyclists for the fall in revenue, but also "greater levels of discounting". The firm has a refresh of children's bikes and accessories in the works, plus "compelling offers for customers, underpinned by continued product and service training for colleagues". The firm said it remains confident in the medium and long-term growth opportunities in the cycling market.

McDonald added: "In my first three months at Halfords I have reviewed all aspects of the Group and it is clear to me that Halfords is a strong business with a well-balanced portfolio of product and service categories, talented colleagues and considerable growth potential."

"Looking ahead, we remain confident in the long-term growth opportunities in Cycling and I will talk more about our plans for Cycling and across the broader Group at our interim results in November."

*The UK bicycle trade does not share its sales data.

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