Halfords’ sales stalled by drop in number of car journeys

The retailer, which has 466 stores including about 20 in Yorkshire, said like-for-like sales declined 2.8 per cent in the 13 weeks to September 30, compared to a 1.1 per cent decline in the previous three months.

Sales of car maintenance products were down 3.3 per cent as people used their cars less, a trend highlighted by the AA this week with figures showing a five per cent drop in petrol volumes in the first half of this year.

Falling demand for car products was partly offset by a 5.7 per cent rise in bike sales as people cycle to work, while the recent success of British cyclists such as Mark Cavendish helped boost premium racing bikes. The retailer has warned that gross margins will be down by one percentage point this year after it put on more promotions to attract cash-strapped consumers. Half-year profits will be between £53m and £55m, down from £68.7m last year.

Chief executive David Wild said: “The cost of motoring is a burden on motorists and people are looking to save money by driving less or deferring services.”

But he added that bike sales were benefiting from the trend, at a time when the company is winning market share in this sec- tor.

Despite the fall in car usage, Halfords said its 242 Autocentres car mechanic business saw like-for-like sales growth of 2.7 per cent, with strong demand for servicing and tyres.

But it said first half operating profits at the business, which it bought from Nationwide Autocentres last year, will be lower than last year.

Its ‘we fit’ service has also seen growth, with 22.1 per cent of the windscreen wiper blades, lightbulbs and batteries it sells now installed onto vehicles by store staff.

Shares closed up 8 per cent, or 23p, at 303p yesterday because many investors had feared the update would be worse.