The cycling market is highly fragmented, with an estimated 2,500 bike shops in the UK, the majority of which are independently owned. Our research shows that these shops are closing at an average of 10% per year. Halfords Group is the market leader, with strong brand awareness in bicycles, parts, accessories and clothing.
Key Facts
Our Approach
Cycling
As the market-leading retailer in mainstream cycling, we are well positioned to serve the needs of the consumer. We will do this by continuing to bring unique and innovative products to market, whilst also providing great value and convenience to customers. As an example, Halfords was the first major stockist of E-scooters and is leading the market with product range and nationwide service capabilities.
As the UK’s leading cycling retailer, we are well positioned to serve the mainstream market, encouraging more people to cycle for leisure, exercise or commuting.
Key
Cycling Products
Retail Cycling Services
Performance Cycling
Key Facts
Our Approach
Performance Cycling
As the cycling market continues to grow, we know the importance of keeping pace with the latest trends. We have invested in the growing popularity of E-bikes, growing our proposition through targeted marketing and by offering products and services for which we know strong demand exists, such as the Brompton E-bike and E-bike servicing plans.
As the cycling market continues to grow, we know the importance of keeping pace with the latest trends. We have invested in the growing popularity of E-bikes, growing our proposition through targeted marketing and by offering products and services for which we know strong demand exists, such as the Brompton E-bike and E-bike servicing plans.
As people start to return to work from the COVID-19 lockdown, we expect there to be a significant rise in the number of people choosing to commute via bicycle. Cycle-to-Work schemes will be important and Halfords, as the market leader, is able to help consumers get to work in a healthy and sustainable way, whether that’s on a mechanical bike, E-bike or E-scooter.
Cycling Market – Competitor Landscape
Mainstream cycling
- Predominantly generalist competitors with own-label bikes
- Limited online penetration in mainstream bikes
- Physical service locations are important
- Cycle-to-Work continues to be an important driver
- Major sports retailers starting to diversify into cycling e.g. JD Sports, Go Outdoors
How is Halfords Group different?
Halfords Group boasts the biggest and most popular cycle brand in the UK – Carrera. In total, approximately 80% of our bikes are own-brand, covering both children and adults at a wide range of price points. Our stores are conveniently located, and our online platform provides support and information to help customers choose the products and services they want. Our bike build proposition is leading the market with free 6-week checks and bike care plans to make sure our customers continue to stay safe whilst enjoying the great outdoors.
Many customers take advantage of our Click & Collect offer, placing orders online via our website and picking up from a designated store at a time which is convenient to them. This also drives positive store footfall. Additionally, we are the market leader in the UK's Cycle-to-Work scheme, supporting sales and introducing new customers to our brand.
Performance Cycling
- Predominantly branded bikes
- Traditional specialists and independents struggling
- Big brands starting to go direct to customers
- Online pure-play continuing to grow and consolidate
- Physical service locations are important
- Cycle-to-Work is an important driver
How is Halfords Group different?
Through Tredz, Halfords has a strong and increasing foothold in the performance cycling market. Offering products and services of particular appeal to performance cyclists has contributed to growth in the overall number of customers and provided many with bikes and exercise equipment during the COVID-19 pandemic. Cycle-to-Work vouchers can also be redeemed through Tredz which contributes significantly to the ongoing success of that partnership. Tredz has a strong online presence which differentiates it from the independent cycle shop community and helps the brand to stay relevant and competitive in a challenging market environment.
Long-Term Market Trends
A likely impact of the COVID-19 pandemic is a significant increase in demand for bikes and scooters, as the public explore clean and cheap alternatives to public transport and look for ways to stay healthy. The Government's £2bn package to put cycling and walking at the heart of transport policy will provide significant investment in infrastructure and subsidies to encourage people to cycle.
E-bikes and E-scooters are continuing to grow in popularity, which will only be boosted by the response to the COVID-19 pandemic. The Government has supported this through an expansion of the Cycle-to-Work scheme, as well as infrastructure investment. Though still a relatively small proportion of the bicycle population, if the trends continue to mirror those experienced in countries such as Germany and the Netherlands, we would expect E-bike sales to double from the current level of approximately 10% of all bikes sold, to 20% within the next few years. The Government is recognising the growth and increasing popularity of E-bikes and has raised the limit on Cycle-to-Work accordingly, from the previous £1,000 to an employer-set limit, meaning that employees are now able to purchase the more expensive E-bikes.
Finally, existing participants in the cycling market are willing to spend more on their cycles and accessories. As a result, we expect higher spend per person to complement volume growth, via demand for more expensive E-bikes, for cycle and accessory upgrades, or additional cycles for a different style of riding.
Whilst the unpredictability of the weather will continue to impact the timing of purchases, the overall trends in the market are positive and show that scope for growth remains.