Halfords’ sales pedal down amid political uncertainty hitting consumers
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Halfords has warned that its summer sales were weaker than hoped after the bicycle and car maintenance retailer suffered from poor weather and a lack of consumer confidence.
The company said it expects “political and economic uncertainty” to hit customers’ spending habits for the rest of the year.
Shares fell 2.6 per cent in morning trading.
Read more: Profit falls steeply at Halfords in face of ‘fragile’ consumer confidence
People are putting off making big purchases such as bicycles, it said, while cooler, wetter weather than last year’s bumper summer had also affected the figures, it added.
Pre-tax profit fell to £58.8m for the 20 weeks to 16 August, an 18 per cent drop year-on-year, and forecast flat profits in 2019-20. Like-for-like revenue fell 3.2 per cent for the period.
It enjoyed sales growth in services, online and business-to-business, but that was not enough to push it into growth.
Chief executive Graham Stapleton said: “The market has been challenging but we are pleased to have seen increased market share in our core categories.
“In the second half, we believe the economic and political uncertainty will continue to impact big-ticket discretionary spend and, therefore, as in the first half, we will continue to focus on improving gross margins and controlling costs.”
“We set out a new strategy for the business last year and while it is still early, we have already seen encouraging signs of progress. We remain confident that it is the right strategy to drive the sustainable growth of the business.”
Read more: UK consumer confidence slumps in June
Last week, it emerged consumer confidence in personal financial situations slumped in August, driven by the increasing uncertainty caused by Brexit.
A measure recording changes in personal finances during the last 12 months fell by two points this month to -1, a decline of five points compared to August last year.