Retailer warns of subdued 2018 despite record Christmas sales
Motor accessories and leisure goods retailer Halfords is the latest in its sector to buck the trend of disappointing Christmas sales.
In a Q3 trading update – which covers the important festive trading period – the Redditch-based business saw group revenue increase by 3.2%, with its retail operation up 3.3% and its car maintenance arm Autocentres up 1.9%.
Jonny Mason, Chief Financial Officer, said: “We are pleased with the overall performance of the group in the 15-week period given the difficult UK retail environment. We achieved record sales for Black Friday and Christmas thanks to great planning and execution and compelling product and service offers. Particular highlights included the growth in fitting services for car parts, cycle repair and increased sales of bikes, electric bikes and dash cams.”
The company said in the update that there had been continued growth in service-related retail sales of 8.6%, with a TV campaign promoting the fitting of bulbs, blades and other accessories.
Its Retail Motoring saw growth in Car Maintenance, against a strong comparative, although this was partly offset by anticipated declines in the smaller categories of Travel Solutions, which annualised very strong increases in child car seat sales last year due to the change in legislation, and Car Enhancement, primarily due to declining sat nav sales.
Retail Cycling saw a 7.8% increase in like-for-like sales and bike volumes were up marginally year-on-year despite price rises introduced across the market during the year.
The company’s multi-channel offer was underlined by online sales growth of 13%, with over 80% of Halfords.com orders collected in store.
Like-for-like sales at its Autocentres showed a 0.7% growth, which helped offset the planned decline in low margin tyre sales via affiliates.
The company’s ongoing refurbishment programme has been rolled out to 40 stores and its Cycle Republic brand expanded its network to 19 shops with new openings in Derby and Canary Wharf.
Looking ahead, the company said it anticipated the UK retail sales environment would remain subdued for the remainder of 2018. Full year pre-tax profit is likely to be broadly in line with current market expectations.
