Halfords ‘cautious’ after trading weakens in run-up to Christmas

It said this marked a hefty reversal after growth of 10.2 per cent on average in October and November.

It said overall retail sales were flat in the 13 weeks to December 29, with wider cycling and consumer tyres markets performing “significantly worse than anticipated” and weakening in the quarter.

Halfords said that, while trading in motoring retailing has now recovered to levels seen in October and November, it is ramping up cost savings in the face of a “very challenging consumer environment”.

It said it still expects full-year profits to remain on track with previous guidance for between £48m and £53m, assuming markets do not weaken further over its final quarter.

But it added a note of caution over the outlook for the new financial year.

“We remain cautious on market recovery in the short term and we are not currently planning for a material improvement in our key markets in 2024-25,” the group said.

Chief executive Graham Stapleton said it is “a very challenging time for our customers”.

“We are still seeing drivers delay essential maintenance and there is a worrying increase in potentially unsafe vehicles on the road,” he said.

But he added: “Trading in the fourth quarter has begun strongly and we remain focused on everything that we can control, with a number of initiatives under way to achieve further efficiencies within the business.”

The group is now looking to save more than £35m over the current financial year, up from £30m previously.

The update showed that sales in its autocentres chain lifted 5.1 per cent on a like-for-like basis in a sharp pullback in growth seen previously.

Halfords said the consumer tyres market remained subdued as hard-up motorists rein in their spending, with “an upward trend year on year in the number of cars with tyres classed as unsafe with a tread depth below the legal limit of 1.6mm”.

It said it pared back declines in bike sales, with a 1.2 per cent fall in the third quarter.

On a more positive note, the pub giant Fuller’s said it is in “great shape” after Christmas and New Year sales surged by more than a fifth.

The company, which runs 370 venues across the UK, told investors that sales jumped 21.6 per cent over the five-week period around Christmas and New Year, compared with the same period a year earlier.

It said the rise was driven by “great performance” across both its pubs and hotels.