Halfords says that its online sales grew by 160% over the summer and accounted for 54% of its sales. Sales across all channels grew by 7.5% in total despite the effect of Covid restrictions in limiting trading from stores
After a spring and summer of overall sales growth it now sees “significant uncertainty” looking ahead. The retailer said in a trading update today that group sales grew by 7.5% in total in the 20 weeks from April 4 to August 21, compared to the same time last year. Retail sales were up by 3.8% on the last year and autocentre sales up by 30.2%. Retail sales fell in the first quarter (-5.8%) after a sharp fall in April (-18.8%) and a continued decline in May (-8%), but started to grow in June (+8.9%) and continued to improve into July (+20.8%) and August (+24.2%).
The strongest growth came online, where sales grew by 160% to account for 54% of sales. Halfords has previously said that in the first quarter alone, ecommerce rose by 200%. Over the 20-week period, the group also saw growth for service-related sales (+6.3%) – made during the course of delivering a service – and for B2B sales (+25.9%).
On a like-for-like measure, which strips out the effect of store openings and closures, group sales fell by 6.5% in the first quarter but grew by 5% over the first half. Retail sales fell by 4.3% in the first quarter but grew by 7% in the first half.
Online sales helped Halfords to stay ahead at a time when the retailer was adapting to new restrictions brought in as a result of the coronavirus pandemic. It has now brought forward plans speed up the ‘rightsizing’ of its store estate, and expects to close up to 80 of its shops during the current financial year. So far it has closed 22 Cycle Republic shops and seven other shops and garages.
During the Covid-19 lockdown, Halfords was able to stay open as an essential retailer. At first it operated a reduced number of stores as dark stores, with service from the entrance, before gradually opening more and trading as Halfords ‘Lite’ stores that allowed a restricted number of shoppers to enter. Throughout, shoppers could order online for home delivery or for collection from a store.
The motoring-to-cycling retailer, ranked Top50 in RXUK Top500 research, said it saw strong demand for cycling products, with sales of electric bikes and scooters up by 230% year-on-year. That helped to compensate for a 28.6% drop in sales of motoring goods over the same period. It says it was well-placed as shoppers moved online since it had raised its level of IT investment sharply over the last year.
Halfords chief executive Graham Stapleton said: “It has been especially encouraging to see our investments in key strategic initiatives both drive and enable such a resilient performance, allowing us to capitalise on favourable market shifts. In the last 12 months we have tripled our investment in the ongoing development of our web platform to enable a dramatic shift to online ordering, with sales up 160% year-on-year and representing 54% of total revenue in the period.
“We have also reaped the benefits in motoring services of a more scaled operation, a group web platform, a best-in-class digital operating model in our garages and a new media campaign to raise awareness of our unique proposition. And our strategic focus on B2B channels continues to drive strong double-digit growth.”
But, he said, there was still “significant uncertainty around the impact of Covid-19 and the macro-economic environment in the coming months and as a result we are cautious on the outlook for the remainder of this year. Looking further ahead we are confident in the long-term strategy of our business and in the growth prospects of the cycling and motoring markets in which we operate."
Halfords sells online and through 444 Halfords shops, three Tredz and Giant shops, 367 garages and 91 mobile service vans.