Halfords dips as the Budget takes its toll
HALFORDS posted a fall in first-quarter underlying sales yesterday, with trade disrupted by May’s general election, June’s emergency Budget and the football World Cup.
The group, which runs 462 Halfords stores and the 225-site Nationwide Autocentres car servicing business acquired in February, said yesterday it remained on track to grow the year to the end of March 2011 pre-tax profit 16 per cent to about £136m despite the sluggish quarter. In the three months to June sales dropped by 2.9 per cent.
Halfords has fared better than most British retailers in the recession as demand for car parts, maintenance services and cycles held up and the firm grew margins and cut costs.
However, chief executive David Wild said: “The real impact of the government’s spending cuts will be felt more in 2011 than this year and VAT goes up in January.
“So I think generally the outlook in terms of consumer confidence is not that great.”
Prior to yesterday’s update shares in Halfords had risen by a third over the last six months, outperforming a 1.1 per cent fall in the UK general retailers index.
With the World Cup being held in June the firm decided to delay the start of its summer leisure promotions until mid-July. Like-for-like sales at Autocentres were flat over the first-quarter period, slightly behind internal forecasts.