Halfords joins list of firms hit by supply chain problems as bike sales dive 26%

By Sarah Butler and Julia Kollewe
A bike on a display stand outside a Halfords store.
The slump in bicycle sales and related kit at Halfords comes after the retailer experienced a bike boom in 2020 as people moved to two wheels from public transport. Photograph: Newscast Online Limited/Alamy

Halfords has blamed “considerable disruption” in global supply chains for a 26% dive in bike sales during spring and summer.

The retailer, which has 404 stores selling cycling and motoring kit, said availability of adult bikes had been particularly low as the industry “continues to experience considerable capacity constraints”.

Those constraints include difficulties in recruiting sufficient numbers of HGV drivers and service technicians, disruption to freight transport and raw material inflation, as well as limits on factory production, with makers struggling to adapt to a global surge in demand prompted by the coronavirus pandemic.

The company said in a trading update that it expected many of the problems to continue “for some time”.

Graham Stapleton, the chief executive of Halfords, said: “Although our cycling business is currently impacted by the considerable disruption in the global supply chain, as the UK’s largest cycling retailer we are well positioned to adapt and to serve our customers, and we remain confident in the long-term outlook for the cycling market.”

The 26% slump in bicycle sales and related kit at Halfords comes after the retailer benefited from a bike boom last year as commuters and families switched to two wheels as a way to exercise and get about without using public transport.

Halfords results marked a switch back to cars a year on from the UK-wide lockdown, with sales of motoring kit up 48% in stores, while the group’s 374 garages experienced a near 44% uptick in trade. Those figures contributed to an overall 10.5% rise in sales for the group.

Halfords is the latest in a string of businesses to warn of difficulties caused by driver shortages and problems with freight transport from east Asia. The distribution and availability of transport containers around the world have got out of sync with demand while many EU-based lorry drivers have returned home since Brexit or during the pandemic and been unable to return to the UK.

Deliveries for supermarkets, fast food outlets and bookstores have also been affected.

The furnishings retailer Dunelm and the salads and ready meal maker Bakkavor also warned they were facing supply chain disruption, including more costly raw materials, higher freight charges and driver shortages.

Dunelm said it expected to beat City expectations on profits for the year ahead as sales rose 26.3% to £1.3bn and pre-tax profits jumped almost 45% to £157.8m in the year to 26 June.

The company said trading in the first 10 weeks of the new financial year was better than expected as homeowners continued to update their properties to deal with more working from home and home entertaining.

Bakkavor said sales were 4% up in the half-year to the end of June but warned it faced “a unique set of challenges in labour availability and this is also impacting the entire supply chain, contributing to raw material price inflation and logistics disruption”.

The Bank of England governor, Andrew Bailey, speaking to the Treasury select committee on Wednesday, said global supply shortages caused by surging demand for goods and shipping issues, had lasted longer than the Bank had expected.

“We expect the bottlenecks to sort themselves out,” Bailey said, adding that demand had shifted from services to goods during the pandemic, pushing up commodity prices such as oil, metals and some agricultural products.

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