Our Marketplace

Our Marketplace

Our Motoring and Cycling products segments remain core, but we have a greater market opportunity in growing our existing motoring services business.

Retail Motoring

The sale of motoring products in Retail stores and online.

Market drivers

  • Ageing UK car parc will lead to more cars within aftermarket segment and an expanding market for motoring products
  • Increase in demand for electric vehicle products such as home charging solutions
  • Product innovation

Motoring Servicing

The provision of motoring services in Retail stores, Autocentres garages or via mobile vans.

Market drivers

  • The ageing UK car parc means cars are requiring more visits to garages on an annual basis
  • Increasing number of customers wanting ‘Do It For Me’ solutions
  • Increasing EV repairs and servicing work
  • Prioritising convenience, services/ repairs done at places of work or car parks

Consumer Tyres

The fitting of vehicle tyres in Autocentres garages or via mobile vans.

Market drivers

  • Miles driven
  • Regular MOTs
  • Tyre tread depth
  • Heavier EVs likely to lead to quicker tyre degradation

Consumer Market opportunities

  • Provide customers with a “one-stop shop” in which they can access all products and services they need from a single, trusted brand.
  • No market-leader in a highly-fragmented marketplace.
  • Very few competitors outside of dealerships able to offer EV servicing.
  • Mobile services are a growing market segment, particularly the tyre fitting industry.

Link to Strategy

  • Progress long-term strategic opportunity to offer customers a “one-stop shop” offering for their driving needs.
  • Significant organic and acquisitive growth has established Halfords as the market leader in aftermarket car servicing, maintenance and repair.
  • Investment in training and equipment to ensure Halfords is a leader in aftermarket EV servicing.
  • Our Halfords Mobile Expert vans deliver elements of car fitting and servicing, such as battery replacement, tyres and diagnostic checks, direct to the customer at their home or workplace.

B2B Market opportunities

  • Cars will increasingly be owned and operated by businesses, rather than consumers, meaning B2B relationships will be key
  • National fleet owners prefer the benefits of contracting with a single provider with national coverage.
  • Commercial vehicle miles driven have rebounded after COVID-19 impacted changes to driving patterns.

Link to Strategy

  • Through the acquisitions of McConechy’s, Universal and Lodge, complementing the B2B relationships already established in the Autocentres business, we have developed a market-leading presence in the commercial tyre market.
  • Our national scale provides us with significant advantage to win large, national contracts.

Data on market size and volume share is derived from third-party providers, as follows:
Retail Motoring and Consumer Tyres: GfK; Motoring Servicing: DVSA (MOT data); Cycling: Bicycle Association.

Cycling

The sale of bikes and cycling accessories and the provision of cycling services.

Market drivers

  • Government investment in cycling infrastructure, accelerated during COVID-19, is a key part of getting more people into cycling, particularly in urban locations where safety is a serious concern.
  • The Government subsidy of bikes through Cycle to Work schemes enable discounted purchasing of bikes through salary sacrifice, giving consumers cheaper ways to cycle.
  • The increase in ultra-low emission zones in cities and a general concern for climate change and environmental issues, is likely to drive people to opt for cycling as an alternative form of transport.

Consumer Market opportunities

  • E-mobility is rapidly growing in importance to customers, offering a lower carbon mode of transport. Customer demand for E-Bikes is continuing to grow, now accounting for one in every five bikes sold.
  • Although most customer journeys begin online, customers are willing to travel greater distances to experience cycling products first-hand in a store. A targeted and joined-up approach to omnichannel provides customers with a leading proposition.

Our response

  • Our strong heritage and over 130 years of experience selling bikes means we are a market-leader in cycling products and services.
  • Halfords Group boasts the biggest and most popular cycle brands in the UK – Carrera and Apollo – which we continue to innovate. In total, approximately 80% of our bikes are own-brand, serving both children and adults at a wide range of price points, from affordable to high performance.
  • Our stores are conveniently located, and our online platform provides support and information to help customers choose the products and services they want. Many customers take advantage of our Click and Collect offer, placing orders online via our website and picking up from a designated store at a time which is convenient to them.

B2B Market opportunities

  • The Government subsidised Cycle2Work scheme provides consumers with a much more affordable way to purchase a bike.
  • E-mobility is driving the market with many businesses searching for lower-carbon means of transport and accessories to help run their businesses, particularly in urban locations, e.g. E-cargo bikes as a ‘last mile’ solution in ultra-low emissions zones such as central London.

Our response

  • We are the market leader in the UK’s Cycle to Work scheme, supporting sales and introducing new customers to our brand.
  • We are also proud to have working relationships with large brands across the UK to which we supply cycling accessories.

Value

Description

  • The UK consumer continues to experience significant financial pressure, with high levels of inflation, low wage growth and higher interest rates. Customers today want the best combination of value, quality and service.

Impact

  • With household budgets increasingly squeezed, consumers have lower than normal disposable incomes to spend on discretionary products and services.

Our response

  • Our strategy for the business is as relevant as ever – a transition away from the traditional retail model towards a services and B2B-focussed business, delivering repeatable revenue streams that are less discretionary.
  • We have supported customers by investing in price and promotions, consumer financing options and our Bike Xchange programme, whilst our market-leading Cycle2Work offer provides the most affordable way to purchase a bike.

Link to Principal Risks

  • Value proposition
  • Brand appeal and market share

Transition to Electric

Description

  • The UK is transitioning towards lower carbon forms of transportation, driven by increasing pressures to reduce the use of fossil fuels.
  • As a result, all forms of electric mobility are becoming increasingly popular with many customers choosing to make the switch to electric vehicles (“EVs”), E-Bikes or E-Scooters. 

Impact

  • Significant growth in customer queries relating to electric forms of transport.
  • Greater demand for servicing of EVs, E-Bikes and E-Scooters.
  • Second-hand markets for electric products. 

Our response

  • We have invested heavily in colleague training and garage equipment, to ensure we can support customers with their need to service EVs, E-Bikes and E-Scooters.
  • We also continue to explore ways to enhance our range of electric products and solutions, including EV charging, innovative new E-Bikes, and second-hand E-Bikes.

Link to Principal Risks

  • Climate change and electrification
  • Culture/colleague engagement and skills

Do It For Me

Description

  • The increasing complexity of vehicles and bikes means that many customers do not have the time, desire or knowledge to carry out repairs and maintenance on their cars and bikes. Instead they are searching for convenient solutions.

Impact

  • This trend has been seen for some time and is expected to continue, with increasing demand for services. 

Our response

  • The strategy of the Group since 2018 has been to accelerate the growth of the Services business, leaning in to this particular customer trend.
  • We have invested in colleague training and equipment to ensure we can maintain pace with customer demand.
  • We have improved our booking process, providing customers with times and locations for their service to be carried out in-store, in a garage or even on their driveway via our fleet of mobile vans.

Link to Principal Risks

  • Service quality
  • Stakeholder support and confidence in strategy
  • Sustainable business model

Convenience

Description

  • Consumers’ lifestyles are getting busier, free time is becoming more valuable, and consumers expect retailers and service providers to fit around their routines with on-demand services and friction-free interactions as standard.
  • Convenience to them is not just about speed but about making their lives easier, even if this comes at an increased price.

Impact

  • Customers expect a seamless shopping experience that is hassle-free and time-efficient. They want choice, whether that is visiting a store, a garage, or having a product delivered to home. 

Our response

  • Over the last few years, we have more than doubled the number of service locations, reducing customer drive time from 30 minutes to 20 minutes.
  • Our mobile van fleet has grown substantially over the past 24 months, giving customers an unprecedented level of convenience, bringing services to their driveway with same-day service options in some instances.
  • Launch of dynamic pricing, enabling customers to make their own trade-off between price and convenience.

Link to Principal Risks

  • Service quality
  • Stakeholder support and confidence in strategy
  • Sustainable business model

Changing UK Car Parc

Description

  • The age of the UK car parc is increasing from 7.9 years in 2019 to a forecast 9.7 years in 2026.

Impact

  • With the average age of cars increasing, they are likely to require more frequent visits to garages for servicing, maintenance and repair.
  • A higher proportion of cars will be greater than three years old, with most falling outside of dealer servicing packages. Customers are more likely to explore aftermarket servicing providers. 

Our response

  • The strategy of the Group since 2018 has been to accelerate the growth of the Motoring Services business. The growth in the number of garage locations and the creation of the mobile vans business has established Halfords as the market-leader in aftermarket servicing, maintenance and repair.

Link to Principal Risks

  • Stakeholder support and confidence in strategy
  • Sustainable business model
  • Brand appeal and market share