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From bikes to homeware: Host of firms warn of supply chain headaches

·2-min read
Halfords is among retailers to warn of supply chain issues (Halfords)
Halfords is among retailers to warn of supply chain issues (Halfords)

Skills shortages and supply chain bottlenecks are troubling bosses in sectors ranging from retail and food-to-go to rubbish and recycling.

Financial updates from a quartet of London-listed firms today revealed mounting concerns, despite a general lift in trade as lockdown measures ease.

For the 20 weeks to August 20 car parts and cycling retailer Halfords posted a 22.8% comparable sales drop in its bikes arm, although its performance was still 24.2% higher than the same period two years earlier pre-pandemic. The motors division recorded 52.1% year on year comparable sales growth.

The firm warned: “The global cycling supply chain continues to experience considerable capacity constraints, leading to low availability of bikes throughout the period. Whilst kids and electric bikes have fared better, availability has been especially low in the adult mechanical category, contributing to materially lower growth rates towards the end of the period.”

It expects the issues to “continue for some time” alongside wider industry challenges including a shortage of lorry drivers and car service technicians, production constraints and cost hikes.

The warning sent its shares down more than 3%, or 11.4p, to 340p.

Homewares chain Dunelm is not immune to the problems, with CEO Nick Wilkinson noting “ongoing supply chain disruption and inflationary pressures from raw materials, freight costs and driver shortages”.

However, investors chose to focus on the FTSE 250 company guiding that profits for the year to June 2022 will come in ahead of City expectations.

Shares in Dunelm jumped more than 6%, or 84.03p, to 1370p.

Supermarket sandwich and salads supplier Bakkavor is also battling “unprecedented challenges in labour availability” but still posted 4% sales growth to £915.7 million for the first half, with pretax profits of £34.6 million, up from £6.8 million.

Waste management group Biffa said: “As with many other businesses across the UK, we are working hard to mitigate the impact of the national shortage of HGV drivers, along with other supply chain challenges.”

Shares in Biffa lost 7p to 397p, while Bakkavor was 6.34p higher at 117.34p.

AJ Bell’s Russ Mould said: “Supply chain issues are putting pressure on companies around the world.”

Numerous sectors have been grappling with delays of goods following disruption from the pandemic.

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