Surge in bike sales during lockdown set to boost Halfords

Analysts have predicted that soaring bike sales have buoyed the retailer during lockdown, with suggestions that its motoring division could also be on the road to recovery. Tomorrow the retailer will tell investors how it traded over the past year to June, although there will be particular focus on its performance throughout lockdown.

In May, the group revealed trading was ahead of expectations in the four weeks to the start of May, as sales fell 23% on a like-for-like basis against the same period last year.

Halfords was particularly strengthened by high demand for bikes and parts, with the Bicycle Association trade body noting a 50% surge in bike sales in April.

As more people return to work and Government guidance continues to suggest people avoid public transport, the company’s motoring division is expected to recover in the coming months.

Analysts at Liberum believe its motoring services may have held up better than anticipated.

Adam Tomlinson from the brokerage said: “We think the market has probably been too cautious about the performance of motoring and particularly autocentres over the near-term.

“With guidance for the public to still avoid public transport where possible, private vehicles, alongside cycling and walking, have remained one of few travel options.”

He said the group could see a further sales boost in August due to the reintroduction of compulsory MoTs.

Nicholas Hyett, equity analyst at Hargreaves Landsdown, believed its mix of autocentres, cycle retail and online investment “make it better suited to compete in a digital-first world than most retailers”.

“However, sales are only one half of the equation and our real focus at these results will be cost control and cash conservation. A large leasehold retail estate and accompanying staff costs mean some costs are unavoidable.

“If the group can keep costs associated with moving to a socially distanced operating set-up to a minimum, it will have done well.”