Within Motoring, the Halfords Group operates in two segments:
In recent years, Halfords has developed Cycle Republic and acquired Tredz. This means that the Group can now service the needs of all cyclists from mainstream to commuter to enthusiast. The majority of bikes sold by Halfords are own-brand. These brands include Apollo and Carrera. Alongside these brands, our Pendleton and Wiggins ranges, which have been developed together with the respective athletes, have also resonated well with customers. We support our ranges with other selected third party bike brands, such as Specialized, Giant, Cannondale, Cube, Haibike, Basso and Lapierre, available at either Tredz or Cycle Republic.
The cycling market is highly fragmented. There are an estimated 2,500 bike shops in the UK. Other than Halfords and a handful of other much smaller chains, the vast majority of the market is represented by independent bike distributors. As the market leader, we conduct extensive research into customer behaviour and trends, as well as the competitive landscape.
The majority of bikes for the UK market are sourced in US dollars from the Far East markets. In 2017, bike prices in the market rose significantly due to the weaker pound, which increased the cost of imported bikes. We anticipated a year ago that this would lead to temporarily lower bike volumes and this has been the case. However, we still believe that volumes will recover in line with their longer term growth trends, over time. This trend was observed over the last significant depreciation in the value of the pound in the late 2000s.
Looking ahead we continue to see good growth prospects for the cycling market for several reasons: