The bullish trading statement from Halfords shows the love for cycling picked up by Britons during lockdown still has momentum.
“Pedal power is also helping Halfords to repay furlough income and mitigate the impact of lockdown on its autocentre car parts, repair and maintenance business,” according to AJ Bell’s Russ Mould.
“Crucially the company seems to have addressed the recent supply chain issues which had seen it struggle to keep up with demand even if supply remains ‘sub-optimal’ in its own words.
“While previous cycling booms, including the one linked to the 2012 Olympics, have lost traction rapidly, it may be that the more dramatic impact of Covid on our lives will make the cycling habit stick this time.
“There may be a natural saturation point for Halfords when everyone who wanted to buy a bike has bought one, but then people might consider upgrades, kids will get bigger and require new larger models and there is likely to be increased demand for Halfords’ services when it comes to repairing and maintaining cycles.
“It also has an opportunity to convince more people about the merits of moving to electric bikes.
“Halfords just needs to ensure it is flexible enough to meet fluctuating demand and remains the cycling retailer of choice.
“On the auto side Halfords could be a beneficiary of a reopening of the economy as people get their cars on the road or at least consider longer journeys for the first time in months and want to get their vehicles checked over to ensure they are road-safe and ready.
“It also seems to be picking up market share as the footprint of less resilient competitors likely begins to shrink.”
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