The car parts-to-bicycles chain said like-for-like retail sales rose 3.5 per cent in the 20 weeks to August 18, with motoring sales lifting 2.3 per cent. Halfords revealed that travel solutions sales jumped 8.2 per cent higher, driven by the rising popularity of holidaying in the UK in the face of poor exchange rates from the Brexit-hit pound. It also reported strong demand for bikes, with sales up 5.2 per cent and electric bikes and repair services also recording strong performances.
Outgoing chief executive Jill McDonald, who is leaving next month to head up Marks & Spencer’s fashion and homewares arm, said: “A combination of good planning and execution meant that we optimised sales from the staycation summer, with strong growth in camping, roof boxes and cycle carriers.”
But the group saw a 2 per cent drop in like-for-like sales at its autocentres service, leaving overall group-wide same-store sales 2.7 per cent higher in the 20-week period.
”Our foreign exchange mitigation plans are working in line with expectations and we are well prepared for the peak trading period through winter,” Ms McDonald said.
Shares in Halfords rose after its trading update. Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Ms McDonald’s strategy had helped get the chain’s “sales engine firing again”.
He added: “Retail growth is strong, and while a sceptic might put that down to the group benefiting from what it has described as a ‘staycation summer’, the revamped and refocused offer seems to have got Halfords into exactly the right place to meet customer needs.”
The group’s latest update showed strong online sales, with growth of 11.2 per cent and 85 per cent of orders picked up in store.
It has revamped 11 stores under a new format and plans to ramp up the roll-out over the rest of the year.
The group confirmed it was on track for full-year profit forecasts and reiterated an expected hit of around £25 million from the weak pound, of which some £15 million will be taken in the first half. But it stressed it expects to fully recover the impact over time.
Many retailers are changing their strategies in response to the growing popularity of staycations.
Earlier this year, a study revealed that British holidaymakers were spending less on overseas travel after the pound’s collapse .
Data released by the holiday rental firm HomeAway showed that British travellers paid an average rate of £27 per person per night for its vacation lettings in the final three months of last year, marking a 15 per cent drop from the same period a year earlier.
Speaking in May, Elena Novokreshchenova, HomeAway’s regional director for the UK, said: “Our data suggests HomeAway travellers are responding to the fluctuating value of sterling since the EU referendum, by becoming smarter about where and how they spend their holiday time with their loved ones.”
Market reaction to the Brexit vote weakened the pound, making imported goods and trips abroad more expensive for Britons. Figures released by the National Caravan Council (NCC) last month underlined UK consumers’ continuing enthusiasm for caravanning and motorhoming.
According to the NCC, production of touring caravans was up 13.7 per cent in the first six months of 2017 compared with the same period last year, while motorhome registrations also rose by 11.3 per cent.
From January to April 2017, Britons took a record 14.4 million domestic holidays, : a figure up 3 per cent over the same period last year.
IN May,Halfords posted a 10.5 per cent fall in annual profits as it took a hit from the weak pound and saw the timing of Easter knock recent sales.
The chain reported pre-tax profits of £71.4m for the year to March 31, down from £79.8m a year earlier, as the pound’s plunge since the Brexit vote sent the costs of imported goods surging by £14m.
It also revealed a 1.2 per cent drop in like-for-like retail sales in the final three months due to the later timing of Easter this year.
But the group said retail sales were 3.9 per cent higher on a more comparative basis for the 15 weeks to April 28. Jill McDonald, the CEO, said in May: “Profit performance for the year was impacted by the weaker pound, but our plans are well developed and I am confident this will be offset over time.”