Our presence in the auto, cycling and leisure markets is unique in the UK. Backed by a heritage and brand trusted by millions, our position is strong, and we're well-placed to thrive in changing market conditions.
We continue to grow market share in our core sectors, building and maintaining leading positions.
Halfords operates in a number of retail and service markets across our 467 stores1 and 305 autocentres1 throughout the UK.
Our products and services can be grouped into auto, cycling and leisure, and our presence in these markets is unique. With 90% of the UK population living within a 20 minute drive of one of our locations, we are within convenient access for a large customer base.
Backed by a heritage and brand trusted by millions, our position is strong, and we're well-placed to thrive in changing market conditions.
Supporting drivers of every car
The number of drivers in the UK (the "car parc") is increasing. It is estimated that there are currently approximately 700,000 new drivers each year and the number of car registrations is growing faster than the number of cars being written off. The number of miles driven in the UK increased again in 2014, having declined during the recession. Petrol prices dropping to a four-year low recently will help this trend to continue.
In this expanding market, Halfords supports drivers of all ages. Our expertise and service is important to both new and experienced drivers alike. Winning the hearts and minds of new drivers through our expertise and value as they gain experience is key to building a long-term customer base.
The average car in the UK is currently estimated to be 7.4 years old. More new cars on the road is conducive to increased fitting and servicing requirements, as newer cars are becoming more technically advanced and have more specific requirements for maintenance. The shift from 'DIY' to 'Do-It-For-Me' (DIFM) is clear.
Our product ranges continue to evolve in line with market requirements and advances in automotive technology. For example, stop-start batteries are becoming increasingly prevalent and we have the right equipment and fully-trained colleagues to be able to cater to this demand, both in our Retail stores and our Autocentres.
We have seen good growth in some subsections of our in-car technology offering. In-car cameras ('dash cams') have proved very popular, with a full fitting service just landed. In multimedia, connectivity and streaming technology, this year saw us launch an Apple-certified system and an Android one is coming soon.
The sat nav market continues to decline, but this is becoming an increasingly smaller and less important part of our business. Key products such as child car seats continue to be important for customers and are providing growth.
Likewise, the services we offer alongside our products continue to evolve, as evidenced by the continued success of our "3Bs" (bulbs, blades, batteries) fitting service. In FY15 in the Retail stores we sold 5.3 million car bulbs and fitted 41% of these on demand.
The growth in new drivers, cars, miles driven and car complexity is also an opportunity for our Autocentres business to attract and retain new customers. Trust, value, convenience and the attitude of our colleagues are also key to doing this as well as retaining our long-standing Halfords customers. There are few businesses that can match us in what we offer.
Inspiring Cyclists of every age
The cycling market in the UK is changing. Whilst the total volume of bikes sold has remained level over the past few years, according to Mintel, the popularity of cycling has led to customers willing to pay more for better products and more on accessories, meaning the market is growing in value terms. Mintel estimate the market will grow by c.33% in the next five years.
Halfords have reacted to and encouraged this trend by focusing on premium ranges, making available a wide range of parts and accessories, and leveraging the knowledge of the colleagues to enhance recommendations and upselling. We also remain very focused on our children's bikes offer and there has also been significant effort to improve our offering on entry-level bikes.
Our bike sales are split by type, with mountain and hybrid making up the bulk of adult bike sales. Road bikes represent a smaller proportion of volume, but with higher average selling prices. There has been considerable growth in sales of foldable commuter bikes.
The trend for road bikes is supported by Government regulation, with new laws that road infrastructure in new builds must take cycling into consideration. In recent months the Cycle Superhighways in London received the green light and work has already started to create them. Halfords is one of many organisations lobbying the Government to invest £10 in cycling for every person in the UK.
This investment could further boost the valuable road bike market, which is mainly represented in city centre cycling. This has driven our introduction of a new cycling only store format, Cycle Republic, to be opened in London and other key city cycling locations, where Halfords' penetration has been low.
These new Cycle Republic stores are giving us access to a new customer base, with a different appetite; a much higher proportion of sales being accounted for by accessories than in other locations.
Female cyclists are another area of focus for us, as they're currently not being catered for enough in the premium market. While a significant amount of SKUs under £500 are accounted for by women's bikes, the reverse is true for bikes above that price. In response, we are launching five premium women's bikes in FY16, three from the 13 range, and two in the VooDoo range.
We are experimenting with electric and power-assisted bikes in our Carrera range, in response to an emerging trend in Europe. We anticipate these products being particularly popular within our London market, and for older cyclists.
Finally, as we see an increased demand for higher-value bikes, demand for cycle repair has also increased - another area of focus for the business.
EQUIPPING FAMILIES FOR THEIR LEISURE TIME
This third category pillar occupies the smallest element of Halfords Retail sales. It is spread across several fragmented markets, principally encompassing camping and outdoor leisure. The range includes a variety of strategically chosen impulse products, which change throughout the year.