Group sales for the 13 weeks to 3rd July were down 2.8% compared to last year and down 6.5% on a LFL basis, “significantly better” than anticipated in late-March, Halfords said, and an improvement on the 23% LFL decline for the four weeks to 1st May. Sales in the online channel were strong, up 200% year-on-year in Q1.
The cycling business has performed “very strongly” throughout the period, Halfords said, up 57.1% on a LFL basis, significantly boosted by the avoidance of public transport, favourable weather conditions and increased adoption of cycling as a health and leisure activity. The easing of the lockdown has led to the gradual reopening of schools and workplaces, and while public transport is avoided and road congestion increases, cycling is becoming an essential way of commuting for many people.
For consumers with older bikes, which Halfords estimates could amount to seven million in the UK, servicing and repairs have proved an inexpensive and popular way to reengage in cycling, with cycling service-related revenue up 41.9% on a LFL basis in the four weeks to 3rd July. Alongside mainstream cycling, Tredz has also traded strongly, up 87.3% year-on-year on a LFL basis, benefitting from the transfer of inventory and customers from the Cycle Republic business, which closed in April.
Graham Stapleton, chief executive officer, said: “This has been another year of good progress against the backdrop of a retail market that was challenging even before the emergence of the COVID-19 pandemic. We are particularly pleased to have delivered strong revenue growth in group services (9%), online (17%) and B2B (25%), which are our main areas of strategic focus. Our autocentres business grew strongly, boosted by the acquisitions of both McConechy’s and Tyres on the Drive, and more broadly in motoring services, we expanded our fleet of Mobile Expert vans from three to 75. This was particularly timely given strong demand for at-home services.
“The start of the current financial year has of course been dominated by the impact of COVID-19, and our status as an essential retailer was a clear endorsement of the wider role that Halfords has to play in keeping the UK moving. Having responded quickly and decisively to cater for the surge in popularity of cycling during lockdown, we are now seeing increased demand for motoring services and products as people start using their cars regularly again having not done so for the last few months.
“Despite the wider uncertainty caused by COVID-19, we remain confident in the long-term prospects for Halfords given the strong macro tailwinds within our market-leading motoring and cycling businesses. The strong progress we have made in FY20 and in the first quarter of FY21 has been made possible by the hard work and dedication of our thousands of colleagues, who I am proud to work alongside.”
Read the July edition of BikeBiz below: