Halfords principally operates in two broad markets: Motoring and Cycling.

Around 67% of Group sales are generated from products and services that are principally motoring-related with the remaining 33% coming from cycling.

67%

Group sales are generated from products and services that are principally motoring related

Category split of Halfords Group revenue (between motoring and cycling)

car icon Motoring Market

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. In respect of the latter, there are over 30,000 garages in the UK, an estimated two-thirds of which are small independents.

Car Parts, Accessories, Consumables and Technology


Key Facts

>£3bn

Market size

20%

Our market share

2+%

Forecasted Market Growth

Market Trends

The UK car parc has exhibited steady growth...

UK Car Parc

Marketplace UK Car Parc graph

...with the average age of cars gradually rising

Average Age of UK Cars

Marketplace average age graph

Our Response

Car parts, accessories, consumables and technology

Our strong heritage and brand means Halfords is a destination for consumers who want assistance with their cars. 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.

Car Servicing
and Aftercare


Key Facts

>£9bn

Market size

2%

Our market share

2+%

Forecasted Market Growth

Market Trends

Cars are becoming more reliable...

Visit to Garage Per Year Light

Vehicle – Frequency

Marketplace visits to garage graph

...but more expensive to fix 

Average Visit Spend – £ 

 

Marketplace average visit graph

Our Response

Car servicing and aftercare

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 a fragmented market of 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.

Motoring Market – Competitor Landscape

Car products and related fitting

  • Limited number of specialists but a highly diverse and competitive set of retailers
  • Limited retail bricks and mortar competition
  • Wholesalers and generalists moving into specialist retail markets with strong omnichannel offer
  • Supermarkets and garage forecourts continue to sell a limited range of high-volume, high-margin products
  • Independent garages offering car parts and associated fitting

How is Halfords Group different

Our 125-year heritage has established Halfords as a household name, with over 90% of the UK population living within 20 minutes of a Halfords store. We have many outstanding strengths that differentiate us, notably our diverse product range and our colleague expertise. Significantly, we have an established and growing ability to provide services on demand in-store.

Car Servicing

  • Technological advancements limit scope for effective delivery by independents
  • Car dealerships expanding into used car servicing
  • Some evidence of sales aggregation (e.g. My Car Needs A…) and mobile services entrants (e.g. Tyres On The Drive)

How is Halfords Group different

Via our Autocentres, Halfords Group offers great value and convenience for UK consumers of car servicing, repairs and MOT compliance. The strength of our brand and the scale of our store and garage estate enables us to invest in the most up-to-date equipment and technology. We have recently begun trialling Halfords Mobile Expert which delivers elements of car servicing, such as battery replacement, tyres and diagnostic checks, direct to the customer at their home or workplace.

Long-term market trends

As UK motorists become more engaged with issues affecting their impact on the environment, they are seeking ways of mitigating against them. At the same time, the Government has increased taxation of diesel cars. As a result, 2018 saw a c.30% reduction in diesel car registrations and an increase in petrol registrations of 9%. Significantly, hybrid and electric registrations were up 21%. Although relatively low volume in comparison, this trend continues to gain momentum.

Cars are becoming more complex. Alongside advances in engine technology, cars are being equipped with an increasing number of intelligent features in order to meet the rising expectation of consumers. Obvious examples include mobile telephone technology enabling the legal and safe making of calls on the move, and advanced satellite navigation capability. The long-term expectation will be that all devices will offer an integrated 'always-on' flow of information.

Autonomous cars, whilst a futuristic concept, are the focus of significant investment by global innovators such as Google and Tesla. Many new cars are now partially-autonomous, providing lane change assistance, parking assistance and adaptive cruise control. There is a high probability that children born today may never need to drive a car.

All of these disruptive changes mean that it is becoming less likely that car owners will possess the knowledge or equipment to replace worn parts or service their own cars in the future. The increasing demand for a 'do it for me' proposition will continue to rise.

Bike icon Cycling Market

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.

Cycling

Key Facts

Overall

>£2bn

Market size

19%

Our market share

2%

Forecasted Market Growth

Our Response

Cycling

Market leaders lead from the front. To do so, we continually develop ways in which to leverage the market. Through our partnership with the Government-supported Bikeability scheme, we help deliver vital cycling proficiency skills to schoolchildren and our support for corporate Cycle-to-Work schemes enable us to bring innovative services and products to a large and diverse market. A great example of this is our recent release of the Cybic Legend range – the world's first Alexa-connected 'smart bike'.

Key Facts

Overall

>£0.7bn

Market size

9%

Our market share

1.5%

Forecasted Market Growth

Our Response

Performance Cycling

As the cycling market continues to grow, we know the importance of keeping pace with 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 a result, we are one of the UK's leading retailers in the emerging E-Bike market and have trained colleagues in every store to deliver E-Bike servicing and maintenance.

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. We also sell other own brands for both children and adults. Our stores are conveniently-located, and our online platform provides support and information to help customers choose the product and services they want.

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 a leading partner of 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 and Cycle Republic, 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. Cycle-to-Work vouchers can also be redeemed at both Tredz and Cycle Republic stores, contributing significantly to the ongoing success of that partnership. Both brands' bold online presence differentiates them from the independent cycle shop community and helps them stay relevant and competitive in a challenging market environment.

Long-term market trends

Looking ahead, we continue to see good growth prospects for the cycling market. Participation levels in the UK remain lower than in many other European countries, particularly among the female population. Government-led schemes and investment in cycle-friendly city infrastructure continues to support a positive future outlook.

In addition, consumers are increasingly engaged with issues which affect the environment and which influence the living of a healthy lifestyle; both of which are intrinsically linked to the benefits of cycling.

The advent of E-Bikes – power-assisted cycling – is serving to widen the market by providing cycling opportunities for older generations and consumers less physically able. E-Bikes are rapidly growing in popularity and, if the UK trend continues to mirror those experienced in Germany and the Netherlands, the expectation is that E-Bike sales will increase from the current level of 8% of all bikes sold, to around 20% over the next few years.

Finally, existing participants in the cycling market are willing to spend more on their cycles and accessories. As a result, whilst volume is predicted to remain relatively flat, the value of the market will grow via demand 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.