Cold snap puts spoke in the wheel at Halfords

Bicycle sales have descended faster than a penny farthing on a slippery hillside, but at least record units of de-icer and screenwash has kept Halfords in the black.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
It's the same sad tale that’s being told by umpteen other high street retailers: the cold weather has frozen sales of seasonal goods at Halfords. The bike and car parts firm has seen bicycle sales fall 8.8% during the past 11 weeks, which takes bicycle revenues down 0.6% for the year as a whole. Not even the ‘Chris Hoy/Bradley Wiggins’ effect could offset the effects of the poor weather.

However, while frost-bitten cyclists have been eschewing their lycra, they have been seeking out the cosy luxury of their cars. Sales of car maintenance goods increased 10.4% during the final quarter of 2012, boosted by strong demand for wiper blade fitting and de-icing products.

Halfords sold an eye-watering 2.3 million litres of screenwash during the quarter, 56% more than a year earlier, while ice scraper sales were up 80% to 138,000 units. That takes underlying maintenance sales up 5.1% for the year.

However, the British weather didn’t squeeze out quite enough snow to sell the requisite number of snow chains and shovels to offset a 5.5% decline in Halfords’ travel solutions arm (car seats and roof racks etc).

Nevertheless, Halfords’ like-for-like sales for the last 11 weeks are somehow up 0.4%, with underlying sales for the full year to the end of March up 0.3%. This means that the company, which runs 460 stores nationwide, is still on track to deliver pre-tax profits of £68m to £72m for the year. Three cheers for de-icer.

Halfords CEO Matt Davies, who joined the group in October, says: ‘We can genuinely claim to have helped keep the country moving during the big freeze,’ while adding that Halfords has a very strong Spring range ready to roll – if Spring ever arrives, that is.

It’s lucky for Davies that the exceptionally cold start to 2013 hasn’t put a puncture in Halfords’ growth as that could have blown the wheels off his big expansion plans. Having opened 23 new Autocentres, taking Halfords’ total to 283, Davies plans to open a further 20-30 during the current financial year, creating a genuine rival to Kwik Fit by offering MOTs, tyre fitting and clutch repairs. Autocentres is a lucrative part of the business for Halfords, generating about 14% of group revenues.

 Davies, in his trademark no-nonsense style, spoke to the Evening Standard about his expansion drive: ‘Any idiot can open large numbers of sites,’ he says. ‘We want to remain incredibly focused on quality sites that will be there to generate cash for the business for many years to come.’ No flies on him, then...

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