Can £20m turn Halfords into a 'service led super specialist'?

Look at Halfords! The cars’n’cycles chain today unveiled a swanky new long term strategy designed to transform it into a “service led super specialist”.

If that statement doesn’t qualify for a “crikey!” or even a “corky o’reilly!” I’m not sure what does.

But there’s more. The retailer says it is preparing to offer a “differentiated, super specialist, shopping experience” that will “inspire and support a lifetime of motoring and cycling”. Wow! I’m not sure quite what that means but Wow!

The thing is, it isn’t just mere hyperbole married to corporate gibberish. CEO Graham Stapleton has promised to put the company's money where his mouth is.

As part of its “capital markets day” he announced plans to invest £20m a year on top of the existing £40m a year of capital expenditure Halfords had told its investors to expect.

That part went down like a lead balloon in the City because analysts had to cut their profit forecasts. Shareholders will have to accept flat profits for a couple of years with only “mid single digit growth” after that.

You have to sympathise with Mr Stapleton a bit. The world’s most successful companies get there by investing heavily in their businesses.

Part of the reason that Britain has so few among their number is that its top companies have a dismal record when it comes to doing that, and it’s partly because of the short termism that dominates in the City.

The UK would arguably be in better economic shape if a few more CEOs were willing to stand up to it by telling their investors that it takes money to make money.

Halfords won’t be in any sort of shape if it isn’t prepared to spend a bit on coping with a new reality that requires companies with bricks and mortar stores to offer more than they used to to tempt customers away from the web. That more is service.

But you can also understand the City’s scepticism. This is Halfords, after all, and there aren’t many who would describe it as one of the world’s most successful businesses.

It has spent too much time driving in the slow lane while cycling through CEOs.

Most of those CEOs eulogised about customer service during their tenures. Halfords' disappointing performance suggests their commitment to it was only skin deep. Customers looked elsewhere and become ex customers.

I’m one of them. After a miserable experience trying to get a wheelchair’s tyres and tubes changed, I went out and found a real service super centre in the form of the South Woodford Cycle Centre. It doesn’t have capital markets days, or flashy presentations that talk about super specialist shopping experiences.

Like many small businesses, it does offer a shopping experience that is consistently good. That’s what keeps customers coming in. Halfords take note.