Reporting its latest quarter trading results, Halfords has shown a 4.8% growth in sales across the board, with stores and online both doing well. But more markedly, the company now says that it “knows 25% of its customers” personally, up from just 3% last year.
Group revenue was up 4.8%, with retail up also by 4.8% and Autocentres by 4.6%. Service related sales grew by 13.9%. Particularly successful has been bike sales and car enhancements, with budding Bradley Wiggins adding to the success. Much of this has been down to the success of its newly launched Cycle Republic website.
Commenting on the results, Jill McDonald, Halfords Chief Executive, says: “I am pleased to report a solid year-to-date trading performance, with Group sales up 4.8% and service-related sales in double-digit growth as we continue to strengthen Halfords’ position as the first choice for customers’ journeys. Motoring sales were robust, driven by car and motorcycle parts, roof boxes and child seats. Good growth in Cycling sales during the peak summer period was supported by new ranges, strong promotional activity, good weather and the success of Halfords’ Olympic cycling heroes. We continue to make good progress on our strategic initiatives; we can now match 25% of our Retail sales to specific customers compared to only 3% last year and in recent weeks we have successfully piloted contactless payments and also launched the new Cycle Republic website.”
The rise in online sales for Halfords is in keeping with many traditional retail outlets on the British high street, as the trading environment has developed and evolved away from purely in-store sales. However, unlike some online retailers a physical store still remains a key part of the business model with 90% of online sales being collected in person through click and collect services. Some of the recent growth in revenue can be attributed to this rise as now potential customers can browse products on offer at their convenience rather than having to make a trip into town.
But it is the markedly increased knowledge of its customers that has proved most interesting. David Cheetham from online stock traders XTB.com explains: “The increase in number of retail sales that can be matched to specific customers is also in part a by-product of online sales and makes it much more efficient to build a database of shopper’s habits. CEO Jill Mcdonald claims that now 25% of sales can be matched, which represents a huge rise on a measly 3% last year. As well as online commerce, the main avenues through which the firm has achieved this strategic shift is through the use of loyalty cards with members and official fans of British cycling and Nectar card holders receiving perks when they shop at Halfords and the firm in return being able to track when, what and where these purchases are made.”
