Independent retailers lose out in Cycle 2 Work scheme

March 4, 2013

By Christine Keighery

The council’s Cycle 2 Work scheme has come under fire from a local independent bicycle retailer who says appointing UK company, Halfords, to administer the scheme has had a detrimental effect on the business and profits of local bike retailers who have joined the initiative.

The Cycle 2 Work scheme enables employers to offer employees savings of up to 42% on a brand new bike and safety accessories for cycling to work. Newry and Mourne District Council worked in partnership with Cyclescheme Ltd to administer the scheme for their employees until last September when it began a new scheme, administered by Halfords.

The disgruntled shop owner told The Examiner that, under the new arrangement with Halfords, local stores “lose out” as Halfords are entitled to 15% of every sale made by an independent retailer on the scheme.

“On a sale of £1000 there is £50 left for the local shop owner after Halfords have taken their cut, and for that we’re expected to complete the paperwork and stand by the warranty for a year” he explained.

“It means Halfords don’t even have to sell the bike from their store or lift a spanner to provide after care and they still rake in the profit.  It’s a win-win situation for them and a total loss for the independent retailers of Newry.”

The local bike shop owner claims he offered identical terms to the council as those offered by Halfords but was simply told to sign up to the new scheme anyway.

Refusing to “hand over profits to Halfords”, he opted out of the initiative but feels bitterly disappointed at the council’s decision to abandon their “shop local” campaign in favour of the UK company.

“Newry and Mourne Council have been hammering home the message to support local retailers.  To give this scheme to a UK run company like Halfords and take profit away from the independent retail sector seems hypocritical to me” he said.

“I’ve provided a local service for forty years, with customer care and back up service which is second to none.  The scheme should have remained as it was, where people could shop anywhere for their bicycle.  This new arrangement doesn’t work in favour of the employee or independent retailers.  Even if we do get a sale from it, there’s no profit to be made from it.”

The independent shop owner is determined to raise his concerns further with the council and is currently awaiting a response from Newry and Mourne District Council’s Chief Executive, Thomas McCall.

In a statement to The Examiner, a council spokesperson said:

“The Council introduced a Cycle 2 Work scheme in March 2007.  Council did not operate the scheme itself but used a partner, Cyclescheme Limited, to operate the scheme.  Council continued with this arrangement until the end of September 2012 when it closed this scheme and opened a new scheme administered by Halfords.

“Under Cyclescheme Limited scheme, bike shops wishing to participate were required to register with Cyclescheme Limited.  The scheme with Halfords operates in a similar way.  All known local bike shops were contacted by Halfords and given the opportunity to join our scheme.

“Council employees can choose from any Halfords Store, which includes the locally based store at Damolly Retail Park, Armagh Road, Newry, and from a further 18 independent stores which have joined the scheme.  The opportunity for other local shops to join remains open.”