Changing tyre distribution landscapes

The suggestion that the UK tyre distribution space is ripe for consolidation is not new. But during the single week that we went to press with the latest edition at the start of October, three big tyre retail announcements were made. First Stop broke through the 150-branch barrier. Point S announced that its buying group of independent tyre retailers now numbers 300. And Halfords bought Lodge Tyres for just over £37 million.

As soon as we reported that First Stop had progressed to 150 branch members in its tyre and autocare network, our news was out of date. Such is the speed at which the company is moving towards its ongoing goal of being a 220-branch network, less than 24 hours after we broke the news of the progress, another garage had opted to join First Stop. Complete details of the recent expansion of First Stop as well as discussion of what it means to be a First Stop member can be found in our interview with First Stop UK and Ireland network manager, Mark Widdows (see this month’s UK section, page 16 for an exclusive interview on the subject).

Similarly, Point S has experienced consistent growth over the years. The news that Point S members hit the 300-branch milestone during October means 24 centres have joined the network since January when the 177-member companies ran 276 branches between them. Along with the network growth news, came the announcement that the company is running a TV advertising campaign on Channel 4. And, at the same time, the network has ongoing plans to be a leading force in electric vehicle maintenance training.

A new number one? No and yes.

It might have been a long time coming, but arguably the biggest tyre distribution news this year is that Halfords has bought Lodge Tyres. The long-anticipated purchase of Lodge Tyres follows Halfords’ acquisitions of Tyres on the Drive, Universal and McConechy’s over recent years. Company representatives shared their excitement in relation to the move in a social media post dated 5 October 2022: “We are excited to announce that Lodge Tyre have now joined the Halfords Group”. Excitement aside, the acquisition further enhances the scale of Halfords’ tyre distribution operation.

Indeed, according to the company’s post-acquisition stock market briefing, the addition of Lodge Tyre’s 50 garages and 248 mobile vans takes the Halfords garage services business to 656 garages, 253 consumer vans on the car tyre side of things. This goes a long way towards Halfords’ stated-aim of 800-odd centres. It is also a marked increase on the total of 600 we reported at the end of April 2022 – a figure that was already up 226 branches compared with the previous year largely thanks to the acquisition of Axle Group/National Tyres. It is probably now enough for Halfords to be the single largest tyre retail brand, since the former incumbent of that position – Kwik Fit – numbers around 650 centre. However, Kwik Fit is the largest part of a wide ETEL-owner tyre retail business, with numbers a total of 729 centres according to our April tyre retail ranking. And therefore, it is a little too early Halfords to claim the number car tyre retailer spot just yet.

Something else that is extremely interesting about the move, is its emphasis on the commercial vehicle tyres. According to the company, the opportunity to join “forces with McConechys and Universal Tyres…create[s] what will be the largest commercial tyre network in the UK”. Indeed, the move reportedly results in a network of “over 90 commercial tyre depots and over 400 mobile commercial vans”.

When Halfords bought Axle Group/National Tyres, company representatives were quick to confirm that they would be rebranding National branches with Halfords orange. Sure enough, signs were swiftly placed in each centre highlighting that National had become part of the Halfords family, whether or not the external signage bore the same message. The impression is a little different this time round. Moving forward, Lodge will retain its identity: “We are very proud to be part of the Halfords Group, however, we shall remain operating under our own identity and would like to thank our Lodge Tyre family for the hard work and support, and our loyal customers who we know will also benefit from the merger of our families.” If the integration of McConechy’s is anything to go by, which now often goes by the hybrid name of Halfords McConechy’s, some kind of dual branding might be the medium-term goal.

But Halfords’ rapid journey to the top of the table is not over for two reasons: firstly, because it is not yet the largest passenger car tyre distributor by branch-count and therefore geographical coverage; and, secondly, because the development of its fast-growing national commercial tyre business is not yet complete. Indeed, while some of the most eye-catching acquisitions have clearly already been made, it wouldn’t surprise anyone to learn that there are further purchases in the acquisition pipeline.

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