Halfords sales hit by petrol price hikes

Rising petrol prices have hit Halfords after it said fewer people were using cars which had dented its sales.

The retailer, which has 466 stores, said like-for-like sales declined 2.8 per cent in the 13 weeks to 30 September, compared to a 1.1 per cent decline in the previous three months.

Sales of car maintenance products were down 3.3 per cent as people used their cars less, a trend highlighted by the AA this week with figures showing a five per cent drop in petrol volumes in the first half of this year.

Falling demand for car products was partly offset by a 5.7 per cent rise in bike sales as people cycle to work, while the recent success of British cyclists such as Mark Cavendish helped boost premium racing bikes.

The retailer has warned that gross margins will be down by one percentage point this year after it put on more promotions to attract cash-strapped consumers. Half-year profits will be between £53 and £55m, down from £68.7m last year.

Chief executive David Wild said: "The cost of motoring is a burden on motorists and people are looking to save money by driving less or deferring services."

But he added that bike sales were benefiting from the trend, at a time when the company is winning market share in this sector.

"Cycling is a very good news story at the moment because it is so much in tune with contemporary trends of economy, health and sustainability.

"With the strength of the British team, there's a halo effect which will encourage sales to grow."