Halfords warns it is facing challenges with bike supplies. This follows Covid restrictions causing a surge in demand and lockdowns in Asia affecting manufacturing.
As the pandemic limited travel and holidays abroad, bike sales rose by 54.1% in the year.
Future sales look positive for Halfords as “pent-up” demand for bikes and continuing restrictions on international travel will support them. However, it does present them with challenges for supply of cycling products.
During the financial year to 2 April Halfords also saw demand for other products as well as strong interest in conventional bikes. There was a 94% increase in demand for e-bikes, e-scooters and accessories.
However, businesses in Asia making bicycles suffered disruption due to local lockdowns. Therefore, global bike supplies were hampered by shortages of raw materials and components such as brakes.
The majority of bicycles in the world are manufactured in East Asia. Even those assembled in the EU often need to ship in components from that region. A sudden increase in global demand places additional pressure on production. Longer manufacturing times and constraints on shipping resulted in temporary delays in supply. There is generally a long delivery time in normal circumstances due to the extended supply chain. This means supply shortages will make it difficult to keep up with the high demand.
A strong year for Halfords
Total sales at Halfords are up 13.1% to £1.2bn for the year, with pre-tax profits rising to £64.5m from the previous year’s £19.4m.
The future is still uncertain for the retailer, as it is difficult to predict when trading patterns will return to normal. As people’s lives get back to a pre-pandemic state, and the hospitality industry and foreign travel fully reopen, things will change.
However, Halfords say it has seen “positive momentum” continue into the first weeks of this year. Demand for motoring services is strong, while cycling demand remains high, and staycation products prove popular.
Sales of products linked to people holidaying at home in the UK rose over the last year. There was also growth in motor maintenance, including services such as car cleaning and body repair. During periods of Covid lockdown, bike shops and garages were included as some of the businesses allowed to stay open. Therefore, Halfords saw a 9.7% growth of revenue at its “autocentres”. Although sales of motor products did fall by 12.1%, as lockdowns and working from home meant less cars on the road.
Thank you for reading Halfords faces Bike supply issues amid Covid disruptions
Looking for a storage solution for your garden furniture, tools and belongings? Look no further – Garden Sheds at affordable prices.