Halfords has reported a surge in bike sales after Brits took to two wheels during lockdown to avoid public transport - but it was not enough to boost overall revenues with cars off the road.
The car parts to cycling gear retailer said it had performed better than expected since the Covid outbreak, but group sales for the 13 weeks to July 3 were 2.8% below last year and same-store revenues were down 6.5%.
The company said a “material” drop in car journeys had hit revenues in its higher-margin motoring division, where sales were down 45.4% in the quarter. But it said the trend was improving and “essential categories performed well after the gradual increase of cars on the road, with batteries and battery care products in high demand”.
Quarterly sales of cycling products boomed as the sunny weather, a nationwide focus on exercise and shoppers’ aversion to public transport all helped sales, which rose 57.1%. Revenues generated from repairing older bikes for people rediscovering the hobby also rose.
“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,” Halfords said.
Overall, annual revenues rose 0.3% to £1.16 billion, with underlying profits down 4.9% to £55.9 million, ahead of City forecasts.
Halfords was able to keep 335 of its 446 retail stores open during lockdown as it was deemed an essential retailer, meaning customers were able to browse online and buy or pick up orders outside the store. It has now reopened stores to the public, with queue marshalling outside the store and pre-booked slots for bike consultations to ensure distancing.
As more people return to work and Government guidance continues to suggest that people avoid public transport, the company's motoring division is expected to recover in the coming months.
Liberum analyst Adam Tomlinson believes the group could see a further sales boost in August due to the reintroduction of compulsory MOTs.
Nicholas Hyett, equity analyst at Hargreaves Landsdown, said he believes its mix of autocentres, cycle retail and online investment "make it better suited to compete in a digital first world than most retailers".