Halfords benefits as shoppers swerve public transport and take staycations

Business

Halfords today said it had benefited from a Covid boost as fears over taking planes, trains and buses sent consumers scurrying to cars and bikes.

The bikes to car parts chain saw revenues increase 5% in the 20 weeks to August 21 with its cycling division’s sales rocketing, helped in part by commuters buying electric bikes.

Chief executive Graham Stapleton said avoiding public transport and a staycation boom was aiding revenues. He said: “There are more cars doing more shorter journeys which puts a strain on the car meaning they need services and MOTs.

“There’s also more people in the UK at the moment than there would normally be, a lot of people have not travelled.”

The retailer saw sales of staycation products like roof boxes and rails improve too.

The chain saw a 160% jump in online sales during the period, despite large numbers of its stores remaining open due to their essential status.

It also said it was buoyed by a jump in demand for e-scooters and electric bikes, which reported a 230% sales jump for the period.

Meanwhile, motoring retail sales fell by 28.6% for the 20-week period but returned to growth in the past seven weeks as more drivers returned to the road.

Halfords’ autocentre business saw like-for-like sales slip by 7.6% over the period but has seen an improving trend during the current trading quarter. “If you look at the Apple and Google data there is almost the same numbers of cars as before the crisis,” Stapleton said.

The company said that trading across the group in the last seven weeks of the period was “significantly better” than it had anticipated in early July.

It said it therefore expects a profit of between £35 million and £40 million for the half-year if it maintains strong trading in September.

However Halfords warned that economic uncertainty could hit profits and the shares fell 4% to 177p.

In a Buy note, analysts at Peel Hunt said: “Halfords’ second quarter trading was stellar in every way: cycling has gone from 4th to 5th gear and motoring saw like-for-like sales growth accelerate when stores went from dark to ‘lite’. Halfords has taken advantage of tailwinds, and the first half should impress in profit terms.”

Halfords ran “dark” stores in lockdown – with customers picking up goods from stores in the car parks – and has now reopened them fully with social distancing measures in place.