Halfords has become the latest retailer to feel the impact of global supply chain problems as it revealed that its bike sales tumbled over the summer.
The firm recorded a 26 per cent decline in cycling purchases in the 20 weeks to August 20, compared to strong growth in its motoring and autocentres divisions.
It said that ‘considerable capacity constraints’ within the cycling supply chain had led to lower availability of bikes throughout the period, especially of adult mechanical models, and is forecasting these issues to ‘continue for some time.’
Pandemic boost: Halfords has benefited heavily since the pandemic started as Britons have become less willing to travel on public transport and more concerned about the environment
Britain’s largest cycling seller also admitted to facing continuing challenges from higher raw material costs, hiring new HGV drivers, general freight disruption and restrictions on factory output.
Its cycling sales were still 9.9 per cent higher, though, than during the same time two years ago, with electric bike sales more than double their levels in 2020.
The company has benefited heavily since the pandemic started as Britons have become less willing to travel on public transport, more concerned about the environment and more confident to ride used bikes for sale by owner, https://Firmania.com/, while fewer cars are on public roads.
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But motoring goods have still sold very well, with like-for-like sales rising 52.1 per cent on last year thanks to staycations boosting sales of touring products by more than half, and increasing sales of bulbs, batteries and blades.
Sales in its car servicing arm, Autocentres, also performed exceptionally well, growing by 43.8 per cent year-on-year and by almost double that percentage figure on a two-year basis.
However, the Redditch-based group said the division’s sales had been negatively affected by Covid-related staff absences and trouble in recruiting new service technicians and drivers for its Mobile Expert Vans.
Driver Shortage: Halfords Group said sales at its Autocentres division had been negatively affected by trouble in recruiting new drivers for its Mobile Expert Vans
Despite this, Halfords expressed optimism that it would be able to weather the effects of the disruption due to its position as the country’s biggest cycling retailer.
Chief executive Graham Stapleton stated that the business was ‘well-positioned to adapt and to serve our customers, and we remain confident in the long-term outlook for the cycling market.
‘The strength of our overall performance is a clear illustration of the relevance of our service-led strategy and gives us the confidence to continue with our investment plans.
We remain positive on our prospects for FY22 and beyond.’
Home furnishings chain Dunelm also announced today that it was facing supply chain disruptions and cost pressures related to raw materials, freight costs and driver shortage.
Upbeat: Halfords expressed optimism that it would be able to weather the effects of the supply chain disruption due to its position as the country’s biggest cycling retailer
But the company said it was in a good position to respond to these challenges and had invested heavily in supply chain capacity to manage any potential disruption.
AJ Bell investment director Russ Mould said this investment puts the firm at a relative advantage over Halfords.
‘Dunelm has been busy restocking its warehouses after strong demand in its 2020 financial year ran down its stockpiles, and it seems to have escaped any problems on this front.
‘It pays close attention to stock levels to ensure it can meet customer demand, and management has also been working hard to mitigate inflationary cost pressures from raw materials, freight costs and driver shortages across its industry.
‘Halfords, on the other hand, seems to have been fighting an uphill battle for its cycling operations.
Demand hasn’t been this strong for two-wheeled power in years, but Halfords hasn’t been able to capitalise on the trend.’
Shares in Halfords Group closed trading 2.5 per cent lower at 342.8p on Wednesday.
