Halfords Group addresses two distinct areas of the UK’s highly-fragmented motoring market: Car Parts, Accessories, Consumables and Technology, and Car Servicing and Aftercare. From the perspective of the former, there is no single equivalent competitor selling all of our product ranges in physical locations, with many specialists and generalists now online only. In respect of the latter, there are over 30,000 garages in the UK, an estimated two-thirds of which are small independents.
Our strong heritage and brand mean that Halfords is a destination for consumers who want inspiration and support with their vehicles. We continue to make progress in our markets through investment in our stores and colleagues to help deliver innovative products and services to our customers when and where they want them. Whilst some of the traditional motoring product markets are in decline, there is opportunity for innovative, unique and differentiated products to be brought to market. Halfords is also seeing an increase in service-related sales as more people are preferring to have an expert fit or install products as opposed to performing it themselves.
The automotive servicing market is large and highly fragmented with no clear leader, and with only 2% share, there is significant opportunity for Halfords to grow. Increasing car complexity, accelerated by the transition to electric, is expected to drive growth in this market. Our goal is, by 2025, to operate from over 1,000 service locations in the UK and ROI, whether a Retail store, a garage or a mobile van. This will enable us to deliver customers the services they want at a location convenient to them. We will continue to invest in equipment and colleague training in order to remain at the forefront of technological changes. This will give us a competitive advantage in this fragmented market dominated by independent operators. Specifically, we have made significant progress in providing industry-accredited training to Autocentres colleagues in the servicing and maintenance of hybrid and electric vehicles, with most of our centres now capable of servicing these vehicles.
The cycling market is highly fragmented, with an estimated 2,500 bike shops in the UK, the majority of which are independently owned. Halfords Group is the market leader, with strong brand awareness in bicycles, parts, accessories and clothing.
Halfords Group boasts the biggest and most popular cycle brands in the UK – Carrera and Apollo. 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.
Through Tredz, Halfords has a strong and increasing foothold in the performance cycling market. Offering products and services appealing 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 through offering a wide range of recognised cycling brands. 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.
The cycling market boom over the last 12 months has been driven primarily by COVID-19 and the increase in people taking up cycling as a way of exercise, days out with the family or as an alternative means of commuting. As we look to the future and move out of the pandemic, we anticipate a proportion of those who have taken up cycling will continue, leading to sustained demand for replacement bikes, accessories and servicing.
Electric mobility was an area of the cycling market already seeing significant growth before the pandemic. Over the last year, E-bikes have continued to be in demand, either as a new and exciting way of travelling, an alternative to public transport or car, or a way for those who are unable to cycle a mechanical bike to access the benefits of cycling. We firmly believe that E-scooters will revolutionise urban mobility and we continue to lobby the Government to change the laws around this mode of transport.
From second-hand bikes and bikes made using recycled parts, to ‘Green’ living and clean air zones, we know the importance of cycling to people who are conscious about their environmental impact. As even greater focus is placed on reducing our environmental footprint, we expect consumers to look to cycling and eco-friendly solutions even more.
The Government’s £2bn Cycling and Walking Plan for England announced in the summer of 2020 is a bold vision that, if implemented, will have a material impact on the cycling market. Examples of initiatives include investment in infrastructure to improve safety and the convenience of cycling, the Cycle-to-Work scheme expanding to accommodate E-bikes, and the creation of clean air zones in many cities across the UK. Over time, this investment will be critical in creating sustainable growth in the cycling market.