Halfords sees profits fall as customers’ budgets squeezed
Halfords has recorded a £28.9m fall in profits compared to last year, with the motoring and cycling retailer citing inflationary headwinds and low customer confidence as reasons for the decline.
The £29m profit seen in the first half of the year was significantly lower than the £57.9 recorded a year ago.
In the business’ interim review for the financial year, it was revealed that Halfords recorded an increase in revenue of 10.2% in the six months leading up to September, however like-for-like sales were down by 1.5%.
Halfords said that service-related sales represented 42.6% of the groups overall sales, with this number expected to arise to around 48% following the acquisition of Lodge Tyre. The retailer expects that over half of its sales will come from services in FY24. Service related sales reached £326m this half, exceeding the total reached in the entirety of FY20.
The increase in services demand means Halfords intends to fill 1,000 new automative technician roles within the next year.
Halfords says that although service-based sales look strong, sales within more discretionary areas have softened.
Graham Stapleton, CEO, said: “In such a volatile macroeconomic environment, our strategy of focusing on the kind of predictable and recurring revenue that comes from motoring services and needs-based products has never been more relevant”.