Halfords focusing on offering shoppers more essentials as they slash discretionary spending
Halfords must transform into offering more essential products as shoppers trim back discretionary purchases, bosses said on Wednesday morning.
The cycling specialist said that a switch-up to selling more “needs-based” items was key as the firm must become less “reliant and exposed to the volatility of more discretionary product markets.”
It warned it was expecting its full year underlying profit before tax to be at the lower end of our £65m and £75m range.
The retailer had continued to see “resilient” sales in its more needs-based categories but had clocked a “softening” in less essential areas.
While it was “challenging” to predict what consumer confidence would be like for the rest of the 2023 financial year, Halfords said it didn’t expect the challenges facing businesses would “dissipate soon.”
The retailer had continued to see “resilient” sales in its more needs-based categories but had clocked a “softening” in less essential areas.
In results for the six months until the end of September, Halfords said earnings had slipped after rampant inflation and softer retail spending.
Group core earnings took a knock of 20.5 per cent to £92m, versus £115.7m in the first half of the previous year.
Halfords’ share price plunged by more than seven per cent in early trading on Wednesday morning.
Commenting on the results, Hargreaves Lansdown’s downturns were bound to happen as a result of the current
“Longer term, we’re supportive of the strategy shift, the old business was heavily reliant on cyclical revenue streams and recent changes increase exposure to more reliable sources of income – rarely a bad thing,” he said.
In addition to revealing financial results, Halfords said it was launching a recruitment drive to hire 1,000 new automotive technicians across its autocentres business over the next 12 months.
Chief executive Graham Stapleton said he wanted to rewire the company’s workforce to meet increase demand for vehicle servicing.
“We want to give people the best possible route to return to work,” he said.
“Becoming a qualified automotive technician can be an incredibly satisfying second career.”
The company is targeting retirees as well as women, offering flexible working patterns and apprenticeships.