Our website uses cookies

Cookies enable us to provide the best experience possible and help us understand how visitors use our website. By browsing Essential Retail Magazine, you agree to our use of cookies.

Okay, I understand Learn more

Poor cycling sales impact Halfords first quarter results

Halfords has reported a slip in like-for-like sales in its first quarter financial results.

For the 13 weeks to 1 July 2016, the retailer reported a group revenue increase of 2.1%, while retail revenues increased 1.5%. But group like-for-likes dropped 0.6%, with retail falling 1.2%, partly due to the 4% drop in like-for-like cycle sales.

CEO, Jill McDonald, blamed the timing of Easter and poor weather in April for the decline in bike sales.

"We look forward to the peak summer cycling season, including our exciting new ranges from Laura Trott and Sir Bradley Wiggins launched ahead of the Olympics," she said.

When it comes to online, McDonald said Halfords eCommerce sales were broadly flat. She said 80% of customers want some form of assistance when they shop online, leading to 90% of click & collect orders. "The other piece is 50% of online is cycling so when we see a weaker performance in cycling it is reflected online too."

Andrew Stevens, lead analyst at Verdict Retail, said Halfords needs to concentrate on its cycling business because it is the most sustainable long-term.

"Halfords must work hard to become more relevant in cycling, and steer its business away from weaker categories which are becoming less relevant, such as car enhancement," he said. "While cycling may represent a smaller proportion of total sales than motoring, it is a more sustainable category for the retailer in the longer term, and Halfords must continue to develop exclusive ranges across multiple price points, and attract different types of cyclists in order to offer the broad bike range lacking at many of its competitors, leveraging its vast store network and heritage to attract new and returning shoppers."

A year ago, Halfords launched an online marketplace with Mirakl. At the time, the retailer said that by partnering with approved third-party retailers it would be able to anticipate and react to trends and consumer buying behaviour, while testing the market with new brands in real time.

Providing an update on the marketplace platform, McDonald told Essential Retail the marketplace is performing well and the retailer has introduced 30 new lines to its product range, including eBikes and tools which have sold particularly well on Mirakl. 

As for Brexit, McDonald noted two factors which may affect the Halfords business: exchange rate and consumer spending. "Because we report in sterling and buy in dollars, we will be impacted by changes in the exchange rate, but we're looking to mitigate this as much as possible," she said. "And in consumer spending, we are well positioned through the strength of our business and the fact the large volume of our sales are needs based. And even in cycling and camping, there will be opportunities to grow if people decide to holiday in the UK rather than abroad."