High street retailer Halfords has reported a significant drop in the cycling market in its latest financial report, as the bike sector dropped 20% year-on-year for the chain in Q3.
In its Q3 trading update, which covered the 13 weeks leading up to 30th December 2022, Halfords said its cycling sector was down by 20% when compared with the same quarter in 2021, but the report said that its overall cycling revenues are outperforming the market despite the dip.
Kid’s bikes continue to perform well, owing to improve product availability and Christmas sales, according to Halfords, with revenues up 4.6% on financial year 2022.
Adult bikes, however, were down by 12% on the previous year, showing the “weaker consumer backdrop” and the “higher ticket nature of the category”.
The Cycle2Work scheme showed a strong performance in Q3, with a 20.1% increase on the previous year.
Overall Halfords revenue grew by 38.3%, thanks to strong sales on the motoring category.
Graham Stapleton, chief executive officer, said: “We have seen strong revenue growth in what are exceptionally challenging circumstances, and we have continued to grow our market share whilst also tightly managing our costs, inventories and cashflows. Consumer demand for our services and needs-based categories, which now account for the majority of our revenue, continues to grow, and our Motoring Loyalty Club is exceeding expectations as customers recognise the value of its unrivalled discounts and offers. With unprecedented demand in our Motoring Services business, we are particularly impacted by the nationwide skills shortage, with recruitment proving to be extremely challenging in the current labour market. We are continuing to take a range of actions in order to fill 1,000 new automotive technician roles, which include our new Later Life Apprenticeship programme, as well as a focus on attracting more women and young people from disadvantaged backgrounds into automotive apprenticeships. We are confident that we can offer unrivalled career progression for automotive technicians, and that this will allow us to attract and retain talented individuals, thereby enabling us to better service the demand through FY24.”
Halfords has been shifting its focus towards the automotive side of the business in recent months, investing in motor repairs and closing all its 22 Cycle Republic high street cycle stores and the Boardman Performance Centre, to free up money to focus on motoring.