Halfords: Customers more cautious on Autumn budget fears
Uncertainty around the Autumn budget is holding back consumer confidence, Halfords warned today.
This morning the retailer said group like-for-like sales ticked down by 0.1 per cent in the 26 weeks to 27 September, on strong prior-year comparatives of 8.3 per cent growth plus a wet spring.
The company is on track to deliver £30m of savings to mitigate inflation of £35m.
Autocentre sales, which represent about 40 per cent of the company’s revenue, rose by 0.8 per cent year on year.
The group said tyre sales were particularly challenging, with “price-conscious customers trading down into budget ranges and elevated promotional activity in the premium market.” The company also noted high levels of technician wage inflation.
Retail sales, which account for the other 60 per cent of Halfords’ sales, fell by 0.7 per cent, with a challenging environment for leisure cycling due to the wet spring.
While a pandemic cycling boom drove growth in 2021, the market has since faltered with supply disruption and a fall in consumer spending on big-ticket items like bikes during the cost-of-living crisis.
The company said outlook remained “uncertain, particularly for big ticket, discretionary purchases… despite pockets of improving consumer sentiment”, but kept guidance unchanged.
Graham Stapleton, chief executive officer of Halfords, said: “While consumers remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming Autumn Budget, we have continued to focus on controlling the controllables and I am pleased with our performance in the first half of FY25.
“Our services and B2B-led strategy has supported Halfords’ growth despite two of our core markets remaining significantly below pre-Covid levels, enabling us to absorb more than £130m of inflation since FY20 while maintaining a strong balance sheet.
“In this environment, we are focused on optimising the existing platform to drive near-term returns while accelerating our investment in the Fusion concept to position us for growth in the coming years.”