Halfords says shoppers still delaying big purchases as autumn Budget looms
The retailer, which sells bicycles and car parts, said sales growth stalled over the first half of its financial year.
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Halfords has cautioned that uncertainty about the economy and upcoming tax changes mean consumers are still holding back from making costlier purchases.
The retailer, which sells bicycles and car parts, said sales growth stalled over the first half of its financial year.
Sales dipped 0.1% over the six months to September 27, compared with the same period a year ago.
This was partly due to there being significantly stronger demand during 2023, particularly for its garages which saw a big jump in vehicle-servicing sales.
Over the latest period, Halfords said there was still strong growth for services, maintenance and repairs, but tyre fitting was more flat with cost-conscious shoppers turning to budget ranges instead.
It also said record levels of rainfall over the spring contributed to weaker retail sales, which dipped 0.7% year-on-year, with leisure cycling demand coming under pressure.
The retailer, which runs about 380 shops across the UK and nearly 550 garages, revealed there were signs of consumer sentiment improving but that people were still spending cautiously.
It said this was particularly the case for more expensive, so-called big ticket purchases.
Graham Stapleton, Halford’s chief executive, said consumers “remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming autumn Budget”, but that the group was focused on “controlling the controllables”.
Cycling and staycation products like camping equipment and roof boxes just aren’t flying off the shelves like they were in the post-pandemic boom
Halfords is expecting to make savings worth £30 million this year, which it said will help mitigate an expected £35 million in inflation costs.
Aarin Chiekrie, an equity analyst for Hargreaves Lansdown, said: “Price-conscious customers have been trading down to budget ranges, and there have been elevated levels of promotions in the premium market to help keep stock turning over.
“Big-ticket discretionary items look like one of the biggest drags on performance.
“Cycling and staycation products like camping equipment and roof boxes just aren’t flying off the shelves like they were in the post-pandemic boom.
“The outlook for next year remains unchanged so far, but there’s no guarantee that performance will kick back into gear by then, so expect more bumps in the road ahead.”