Halfords Bike Sales Reflect Cost Of Living Squeeze

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Halfords has issued a trading update which appears to show that the cost of living is taking its toll on its cycling business. Overall, cycling sales are down 21.2%, with growth in the auto side of the business offsetting these losses. The figures in the report cover the 13 weeks up to December 31st 2022, and compare sales against the same periods in both 2021 and 2020.

But look more closely at the details they’ve provided, and it seems that it’s not as simple as ‘people aren’t buying bikes’. In certain markets, people are buying bikes, in increased quantities. The statement says:

▪ Our own brand Premium Adult bikes performed well, up +20%, as did E-bikes growing over
+100%.
▪ Our online performance cycling business “Tredz” also performed very well, up +47%.
▪ Kids bikes sales started well but softened later in the period. Unexpected freight delays in
Junior bikes compounded the impacts of Omicron including lower footfall and general
customer caution

Halfords trading update

So, premium bikes (more expensive), ebikes (also more expensive), and Tredz (likely catering to an enthusiast market, likely to be buying higher end bikes) have sold quite significantly more. Yet, overall, sales are down 21.2%.

This suggests to us that at the budget end of the market sales have slumped dramatically. This would match up to other cost of living pressures, where those with higher incomes tend not to feel the squeeze as much or as early as those on low incomes. As the year progresses, if the economic outlook does not improve, we would expect to see a slowing of sales elsewhere in the Halfords market. Those on the highest incomes that are largely insulated from economic conditions may well not be Halfords’ core market – the highest price bike on the Halfords website is a road bike at ‘just’ £3,900′, while the most expensive mountain bike is an eMTB at £2,999. If mid to high earners start tightening their belts, Halfords could well feel the squeeze.

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Hannah came to Singletrack having decided there must be more to life than meetings. Having worked in policy and project management roles at the Scottish Parliament and in local government, Hannah had organisational skills that SIngletrack needed. She also likes bikes, and likes to write. Hannah likes all bikes, but especially unusual ones. If it’s a bit odd, or a bit niche, or made of metal, she’s probably going to get excited. If it gets her down some steep stuff, all the better. She’ll give most things a go once, she tries not to say no to anything on a bike, unless she really thinks it’s going to hurt. She’s pretty good with steri-strips. More than bikes, Hannah likes what bikes do. She thinks that they link people and places; that cycling creates a connection between us and our environment; bikes create communities; deliver freedom; bring joy; and improve fitness. They're environmentally friendly and create friendly environments. Hannah tries to write about all these things in the hope that others might discover the joy of bikes too.

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  • Halfords Bike Sales Reflect Cost Of Living Squeeze
  • matt_outandabout
    Full Member

    Our own brand Premium Adult bikes performed well, up +20%, as did E-bikes growing over
    +100%.
    ▪ Our online performance cycling business “Tredz” also performed very well, up +47%.

    People buying bikes to commute on?
    Maybe buying a hobby they can do from home or not having to pay a season ticket / access fee / cost each weekend?

    yoshimi
    Full Member

    Halfords own Tredz….

    Everyday is a school day

    thisisnotaspoon
    Full Member

    Maybe buying a hobby they can do from home or not having to pay a season ticket / access fee / cost each weekend?

    Unless they’re downgrading from a swanky golf club then it’s still a very expensive hobby.

    Interesting that it’s still going up at all though, I’d have thought the COVID wave of sales would have well and truly passed by now. So being up at all relative to the last couple of years is a big deal. But maybe that’s what’s being shown in the lower range bikes whereas the higher end is just business as normal. And it just shows how niche high end bikes are, if a 47% increase in sales doesn’t even offset single digit drops in lower end stuff.

    The higher end would also include cycle2work as well.

    Anecdotally, those Voodoo Brizango Carbon’s have been out of stock for a long time, so they’re obviously selling more bikes than anticipated or can supply.

    pmurden
    Full Member

    I think a big problem in the bike industry is that for the last 3 years or longer, bikes got so dam good at what they do so people do not feel the need to replace them. I’m not saying everyone being skint isn’t a factor but me and pretty much everyone I ride with are not in a rush to go new, as they love the bike they past bought.

    freeagent
    Free Member

    whereas the higher end is just business as normal. And it just shows how niche high end bikes are, if a 47% increase in sales doesn’t even offset single digit drops in lower end stuff.

    I think (as discussed before on here) there is a decent segment of society who’ve been totally unaffected by the cost of living crisis and are carrying on buying luxury everything without a second thought.
    Based on some of the road bikes i’ve seen out on club rides there are still plenty of people spending £5k+ on a bike to ride on Saturday mornings.
    Apparently Bentley had a record year last year – which tells you all you need to know.

    We went on holiday to Rome the week before Christmas – it was packed with tourists, and the high-end shopping districts seemed to be doing a roaring trade.

    chakaping
    Free Member

    Yet if you look at the previous years’ Q3 reports, 2021 shows a 35% increase in cycling revenue for that quarter – and almost 50% increase in revenue for the year to that point.

    So how significant is a 20%-odd drop now?

    More stats required, I’d say.

    Reports here if anyone wants a rummage.

    whatyadoinsucka
    Free Member

    2020/2021 were blip years, everyone wanted a bike, supply issues, costs rises etc
    probably need to look at like for like over the last decade to see where the trend is going.

    as @freeagent points out this cost of living crisis isnt impacting everyone, it seems to me to be media led, they are dragging out people who have struggled for years, granted disposal income is reducing due to higher bills, housing/mortgage/rent heating and food bills, but I’m not seeing a slow down in motorway traffic, or popular bars and restaurants. i was at hathrow and manchester airports mid december both Rammed

    i expected more Q1 failures when the rents come due, but no unexpected major casualties so far.
    the recruitment agents are still pestering me on linkedin with jobs,

    Daffy
    Full Member

    Agreed – they need to publish LFL sales vs 2019.

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