Spending squeeze puts Halfords into reverse

Soaring petrol prices and the squeeze on household budgets have dented sales at car spares and cycle retailer Halfords.

The retailer, which operates more than 450 stores, yesterday said like-for-like sales reversed 2.8 per cent in the 13 weeks to 30 September, compared to a fall of just 1.1 per cent 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 5 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 cash-strapped commuters took to two wheels, 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 ran more promotions. Half-year profits will be between £53 and £55m, compared with £68.7m last year.

Chief executive David Wild said: “People are looking to save money by driving less or deferring services.”