Bad weather in the U.K. was blamed for causing a sharp drop in sales in Halfords' cycling range in the eight weeks ended Aug. 28. The rainy and inconsistent weather in July and August discouraged casual cyclists from buying new equipment, according to the retailer, which saw revenues in those eight weeks decline by 11 percent compared with the same period last year. Summer rainfall levels were about 13 percent more than the long-term average, the country's Met Office said. Halfords shares lost 10 percent as the news of the sales drop broke in the company's unscheduled financial update.
The news came rather unexpectedly as the British retailer - the biggest seller of bicycles in the country with a market share of 20-25 percent – had reported in June an 11 percent rise in full-year pretax profit and annual revenues reaching £1 billion (€1.4bn-$1.5bn).
Jill McDonald, Halfords' chief executive since May, reportedly described the recent sales decline as “disappointing,” but emphasized that it came after two years of strong growth in the category. Discounts in high-end bike prices from competitors also had an impact on Halfords sales, according to McDonald. Outside of cycling, Halfords said business in all other areas remains “robust,” with car parts performing strongly.
Cycling has been one of the sports on the rise in the U.K. over the last few years. It is now the country's third most popular, behind swimming and athletics but ahead of football. According to Mintel, the British cycling market jumped by 42 percent in value to £956 million (€1.3bnm-$1.5bn) in the five years to 2014. The growth in the years to 2020 is expected to be a strong but more moderate 35 percent.
