Halfords has announced flat sales in the first half of the year, citing careful consumer spending due to upcoming financial changes.
- The company’s like-for-like sales marginally decreased by 0.1% owing to a challenging comparative period from the previous year where sales had grown by 8.3%.
- Retail sales saw a decline of 0.7%, in part due to adverse weather conditions affecting the cycling sector.
- However, the Autocentres segment saw a slight increase of 0.8%, driven by robust growth in services and maintenance.
- Despite economic challenges, Halfords progressed with its Fusion strategy, focusing on enhancing customer experience and colleague training.
Halfords has released its financial performance for the first half of the fiscal year, revealing a modest decline of 0.1% in like-for-like sales. This performance is particularly noticeable against last year’s 8.3% increase, positioning the results as a testament to the current economic climate and consumer caution. As consumers face potential changes in their discretionary spending with the upcoming Autumn Budget, these results underscore the cautious approach being taken by many.
In the retail segment, Halfords reported a 0.7% decline in like-for-like sales. The company attributed this decrease partly to particularly unfavourable weather conditions, marking the UK’s wettest spring since 1986. Furthermore, the cycling division experienced a significant challenge during this period, contributing to the overall dip in retail performance.
Contrastingly, Halfords’ Autocentres delivered a 0.8% increase in like-for-like sales. The growth was mainly driven by strong performances in services, maintenance, and repair offerings. This segment now comprises 40% of the group, highlighting its growing importance in the company’s portfolio.
In response to the challenging market conditions, Halfords continued its commitment to the Fusion concept strategy, which focuses on enhancing the retail car park service proposition across 50 towns. Additionally, it has nearly completed training its staff in retail and Autocentres to deliver comprehensive customer solutions. This strategic move is aimed at boosting service quality and expanding its market reach.
Despite these efforts, Halfords maintained its annual outlook unchanged, stating confidence in achieving £30 million in targeted savings for the year to counteract £35 million in anticipated inflation. The company’s commitment to managing controllables and maintaining a strong balance sheet while focusing on future growth and investment underlines its strategic approach in a volatile market.
In summary, Halfords’ flat sales reflect consumer caution and challenging market conditions, yet its strategic initiatives aim to position it for future growth.
