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Halfords shares on a steep descent after summer washout hits bike sales

Halfords reports disappointing sales in bikes - and blames a thoroughly British summer

Halfords has seen disappointing sales figures on bikes for the summer, reporting decreasing trading for the 8-week period 4 July 2015 to 28 August 2015.

The disappointing cycling performance, down 11 per cent, was down to greater levels of discounting on mainstream bike brands, as well as poor weather deterring casual cyclists.

On the other hand, the groups’s cycle repair business remained strong, up 28 per cent.

Its weather explanation for weaker bike sales is supported by national statistics.

According to the Met Office, summer rainfall was up 13% on average by 26 August and the summer is set to have been wetter than all but five summers since 1988.

However shareholders were unimpressed and the group’s shares fell 8.5 per cent to close at 466.2p.

The news comes since the company’s acquisition of Olympic champion Chris Boardman’s eponymous bike business, plus the revamp of its Cycle Republic chain and more space devoted to bikes and accessories in the mainstream stores.

Halfords commented: “As we exit the peak season for mainstream bikes we will launch a complete refresh of children's bikes and accessories alongside a series of compelling offers for customers, underpinned by continued product and service training for colleagues.

“Looking further ahead, we have an exciting pipeline of innovation for bikes and accessories and we remain confident in the medium and long-term growth opportunities in the cycling market.”

Jill McDonald, Chief Executive, commented: "This recent weakness in our cycling sales is disappointing, but it comes after two years of very strong growth in the category.

"Looking ahead, we remain confident in the long-term growth opportunities in cycling.”

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34 comments

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Leodis | 8 years ago
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I don't know how anyone can compare buying direct from a manufacture i.e. Canyon to a retail store on the high street.

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OldRidgeback | 8 years ago
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I buy stuff like tyres, locks and lights from Halfords. The local branch is good for stuff like that. When I need some work done on one of the family bike collection that I can't do myself, I take it to the local independent shop.

I did buy a couple of bikes there for my kids when they were younger. Now my kids have more specialist requirements, I'm not sure I'd get another bike from Halfords. An yes, I've seen many kids turn up at the track with their forks on backwards having just bought them. But there is a lot of snobbery about Halfords that I'm not sure is entirely deserved.

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Awavey | 8 years ago
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but all these reasons mentioned so far,valid though they maybe, are just why Halfords havent broken through into becoming the defacto highstreet cycle shop of choice, for all the Decathlons & Evans alternatives, Halfords by far have the greater nationwide presence through sheer volume of stores.

So their growth should have just hit a certain level and then flatlined based on their current approach and just not gone on any further, thats its actually not even able to do that and is in effect a double digit decline in an era of growth for cycling,although the Tandem group have also commented previously theres not much evidence in their sales either of this growth effect going on.

But it does suggest on both counts really there is something in cycling retail that isnt fully apparent in why these business are not able to sell as many bikes as they are expecting.

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ydrol | 8 years ago
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Last time I checked Halfords didn't sell spokes. QED.

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crikey | 8 years ago
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Maybe we are reaching Peak Cycling and the market is saturated to the extent that sales will begin to fall...

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Simon E replied to crikey | 8 years ago
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Agree 100% with hampstead_bandit.

crikey wrote:

Maybe we are reaching Peak Cycling and the market is saturated to the extent that sales will begin to fall...

or do you mean Peak Cycle Sales? Not everyone buys a new bike every year.

If their sales figures fall all you can deduce is that Halfords are selling less stuff than last year; I wouldn't extrapolate that to any other retailer. My LBS was hectic on Saturday morning as usual and we've no idea whether other chains and the internet businesses are any less busy.

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BigBadTrevsy | 8 years ago
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My recollection is of the weather down here inin the Chilterns was a dry spring with plenty of sun but a cool breeze and a generally dry summer with a couple of very very wet days. Not enough to deter cyclists I'd guess. It's the quality of Halfords offering and staff which is letting them down.

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QDubs | 8 years ago
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Halford's are a helmet, lycra, and hi-viz store that sells bikes as accessories.

This: http://streets.mn/2015/07/29/why-are-bicycle-sales-declining-for-the-14t...

Who wants to buy and wear a sweat producing foam helmet even if it comes with a bike attached? Most people don't want to be MAMILs. Or even associated with them.

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hampstead_bandit | 8 years ago
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Its really simple - retail businesses thrive with good staff

the old adage, "pay peanuts, get monkeys" is true

paying minimum wage, or barely above, will never attract or retain good staff

look at the high staff churn at Halfords (one of the reasons they stopped putting workshop staff through Cytech); I've read their typical turn over for new starters was 4 months.

There is another saying, "Don't worry about the staff who are leaving, but the ones staying behind". As good staff leave, because they can (they are employable outside the business), a business becomes weaker.

blaming the weather is just weak sauce, and a typical corporate cop-out, rather than looking hard at the real reasons a business is constantly providing poor customer service from unmotivated and inexperienced staff  3

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Simon E | 8 years ago
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I don't think blaming a bit of rain is the way to run a billion pound chain of car accessory stores (of which cycling is only a part). It's 8 weeks, while in the 3 months to 3rd July cycling sales were 2% up on last year. More detail at the Graun.

Halfords is fine for engine oil and car bulbs but I wouldn't buy a bike from them and would never trust them to fix mine!

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StraelGuy | 8 years ago
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Don't forget, they will price match their own web price if you ask. Their stuff is often much cheaper on the web. Plus you get another 10% off if you're a member of BC.

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TheHungryGhost | 8 years ago
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My local Halfords doesn't have anywhere to lock up your bike, which isn't very handy.

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Redvee | 8 years ago
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From the local Cycle Republic store. aka Posh Halfords

//pbs.twimg.com/media/CNaRC6hWcAAmOOc.jpg)

At least the forks are the right way around.

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giskard | 8 years ago
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As far as bike stuff goes, Halfords are only good for click and collect of things like tyres and tubes in my experience.
I got my first Cycle To Work bike through Halfords as they are who my employer uses. Bike was a Kona Jake the Snake 2010 and the staff at my local Halfords couldn't set it up properly as the front brake didn't work coz they'd left on a bracket that was part of the packaging the bike was shipped in. They wouldn't remove said bracket as it was a safety feature according to them. Took the bike to a LBS who checked the bike over and got it all working fine after removing said bracket and adjusting the brake cables.
Two years later the frame cracked and was replaced with a new 2012 one which meant that not all components from the old frame could be swapped to the new frame. To their credit, Halfords did source the required new parts without quibble and fitted them all free of charge, so I was very pleased until I found out that they'd fitted the stem to the carbon fork/steerer using the wrong fixing which gouged out the carbon in the steerer, leaving it seriously weakened and potentially a death trap. I had to get Halfords to order a replacement fork which I gave to the LBS to fit. I've little or no confidence in Halfords tech staff.

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ChairRDRF | 8 years ago
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More importantly, I don't think they have the right attitude to cyclist safety http://rdrf.org.uk/2014/02/12/whats-wrong-with-halfords-cycling-top-tips/

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Sub5orange | 8 years ago
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i use my local halfords very rarely on spares when they are discounted plus i get british cycling discount applied. the reason i do not use them more is that my indoor experiences are always negative, usually because it always takes ages to get out of the place. the last time was my worst experience. i use click and collect. the item had not arrived on the day it was supposed to. i phoned them the day after and they confirmed it had arrived. however when i turned up one staff was looking for 15 minutes for it before another one found it within 15 seconds in the place where the first one should have looked in the first place. certainly would never use their workshop.

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Airzound | 8 years ago
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Halfords, where shall we start……...

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Canyon48 | 8 years ago
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They can't even put bar tape on correctly in Halfords, I had a look at one bike (when I went in to get some cheap tubes), the bar tape was pretty much dangling around the bars, the top cap hadn't been screwed on properly and I think a 5mm headset spacer was missing as the forks rattled up and down in the head tube.

My local Halfords is staffed by people who are one/two years younger than I (I finished A levels last year) and I certainly wouldn't trust them with my bicycles.

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Dr_Lex | 8 years ago
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I can't be sure whether Halfords have let me down more times on click-&-collect than PBK have on orders. Suffice to say, I've given up on both of them, and happily shop at CRC/Edinburgh Bicycles/Wiggle/Merlin/Planet X etc.
Poor service & no stock are more likely reasons than a few days of heavier-than-usual rain. Beginning to sound like Thorntons with their excuses for low sales.

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Matt Triban | 8 years ago
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Although it's not in every case but on the whole Halfords is expensive, staff not very knowledgeable (usually part time students) and a poor variety of stock.

I buy a lot online but for a bricks and mortar store I much prefer Decathlon or my LBS and would only use Halfords as a last resort.

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kwi | 8 years ago
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I think the real crux is that the first time buyer market are getting a bit more savvy and it's about time Halfords started investing a bit more in their staff so they don't spout rubbish that gets corrected by the first person a customer meets on leaving the shop.
(I was nearly asked to leave last time I was in after interrupting a sale to give cheaper advice to a potential customer.)

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Must be Mad | 8 years ago
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Look, I know there have been a few wet days this summer, but this is nothing new. The truth is that this summer has NOT been particularly wet.

Blaming weather for poor sales is the first sign of a business looking for excuses.

I suspect the real problem is that the likes of Decathalon, Evens, Wiggle etc are doing a better job catering to the 'first time buyer' market which has been Halfords traditional bread and butter.

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Ratfink | 8 years ago
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Some other shops accept halfords bike2work vouchers.
I ordered a lock click and collect a couple of weeks ago,it said will be instore Fri after 1pm.
Apart from a text saying we're preparing your order i heard nothing more i asked in the shop and they said it's got to be ordered from the suppliers so it might take a while.
Never heard anything else until they emailed me to rate them on trustpilot.
Which i duly did  1
On Fri i walked into decathlon picked one up paid and walked out.A far more pleasant experience.

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gazza_d | 8 years ago
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I have a bike on order though Halfords, purely because that's where I had to purchase it from though our work scheme.

I am surprised sales are down as much as they are, as Halfords is one of only a couple of bike chains really in terms of the retail sheds the UK pop seem to love. Decathlon only have a handful of stores and none north of Leeds.

It'd be interesting to see figures from across the industry as the summer has been utterly dismal

Halfords can be competitive, especially on parts through click & collect which are usually cheaper online than instore for same item, but then they'll price match themselves

As for staff, it seems to be luck of the draw. the odd one seems to ride & have a bit of a clue, but most seem to be rotated off the car parts counter

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lambylamby | 8 years ago
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https://www.youtube.com/watch?v=5b0-HVJzTuA

This is the best video 'your group ride, turns into a mate's race'.
I'm sure the only thing you'll be cleaning up is their bikes after you've lost the race then...

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lambylamby | 8 years ago
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The other thing I don't understand, is why have boardman bikes and 13 bikes, of which both seem to be lumped in the same price/equipment market, then lump the voodoo cyclocross with the carrera range? It's barmy! They buy/create bike ranges to compete against themselves! Self torture!

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bikebot | 8 years ago
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In traditional (rather than online) retail, I think Decathlon are eating their cake. Better range, better value, better own brand stuff.

I still use Halfords quite a bit for parts via click and collect. That's surprisingly price competitive, but in terms of the retail experience they might as well be Argos. Or even an Amazon locker.

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ianrobo | 8 years ago
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You say we lag behind but it is the typical British story. Germany through Focus, Canyon etc offer high spec bikes at a price but quality.

We offer cheap stuff trying to compete with China. It is why Germany export quality and we struggle apart from JAg (Indian owned of course).

Germany is the model all our businesses should aspire to.

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lambylamby replied to ianrobo | 8 years ago
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Agreed. The thing is, I want to 'Like' British brands. As lovely as something as Mason, or even Bowman is, they are very very expensive (and rightfully so!). The only thing I can see as almost competitive is the Planet x range. I just wouldn't consider a Raleigh or other large 'British' brands to these German cycling brands. I just read this article and thought 'tough shit', because of companies like Halfords, it could easily put people off buying bicycles, when the staff are clueless and the products are uncompetitive. If only someone had the kick-ass initiative to make some comparable bikes to our German friends!

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lambylamby | 8 years ago
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My problem is they offer nothing compared to German counterparts.
I don't understand why there are so few big names that have taken the initiative (including halfords) to offer something of good value. Look at Radon or Canyon, you can get a good frame with excellent components for well under a grand, then you look at halfords, they have own brands Boardman competing with again, own brands 13 bikes which I thought sounded like a great idea by halfords, something a bit premium but after watching the videos they released they really sound a bit up their own ass over-egging the pudding and basically selling cack (brakes hidden by the frame to make it more aerodynamic, yet the performance according to Road.cc was 3 and a half stars). Instead of blaming the weather, Halfords need to get competitive price wise, on top of that, they need to offer good a good bike to price ratio in the first place.

To recap, is this a cyclocross bike or a trailer for the film Gladiator? https://www.youtube.com/watch?v=5-rCAbITeS8
I'm trembling in my boots at the claris groupset, for £499 or €679, that is a rip off!

To recap, specimen number two, another cyclocross - http://www.halfords.com/cycling/bikes/road-bikes/voodoo-limba-cyclocross... Lets get a middle class prim and proper chap off the street to advertise this 11.8kg beast (this is as heavy as my mountain bike, I had to re-read the weight), it is just a fancy paint job, no wait, it's not even that, they even think that being like that shoe brand kickers from the 90's by colour co-ordinating the left and right bars just in case you don't know which hand to put where!? WHY!? all for the handsome price of £449, or €611. again, no bargain.

thirdly http://www.halfords.com/cycling/bikes/road-bikes/carrera-virtuoso-road-b...
Thirteen seconds in on this video. The guy mutters out 'Excellent spec'. Why?! it's the wankiest spec you can put on a bike! sell it for what it is! A weekend bike that occasional riders can enjoy or a winter trainer, don't fob it off as anything good! I want to like halfords stuff, but it's overpriced, I have no problem with cheap bikes, but when a company tries to advertise really really crap products for something they aren't it gets my goat. Go to your local bike shop or buy online from Canyon or Radon etc. Yet another thing the British are lagging behind the Germans on.

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