Halfords has become the latest big name company to report a hit to sales from supply chain disruption, warning its struggles may take time to overcome.
The bikes-to-car parts and servicing retailer said like-for-like cycling sales were down by almost 23% in the 20 weeks to 20 August compared to the same period last year.
It said that while the figure reflected tough comparisons as bikes were in high demand for exercise at the start of the COVID crisis, the global distribution woes accelerated towards the end of the trading period.
The problems facing the UK’s largest cycling retailer include factory production constraints, raw material inflation and freight disruption.
Other firms to report similar difficulties include major supermarkets, McDonald’s, Greggs, Nando’s and Wetherspoons.
The issues are linked to pandemic disruption and are compounded by a worker shortage holding back the corporate fightback from the public health emergency.
This is acute in the area of distribution particularly, with the UK facing a shortfall of 100,000 HGV drivers alone.
Halfords also pointed to some disruption from COVID-related staff absences.
Despite the cycling setback, the company said it had continued to benefit from the surge in staycations.
It stuck to its full-year target for pre tax profit to come in above £75m thanks to higher sales in its retail motoring arm.
Motoring product revenue was up 52% on a comparable basis, the company said, helping group sales almost 11% higher.
Halfords said growth in its motoring business will enable it to met annual profit expectations
Chief executive Graham Stapleton said: “The first 20 weeks of FY22 delivered a strong trading performance against a hugely challenging backdrop.
“Our motoring business now represents 65% of our revenues and continues to go from strength to strength, driven by the increased scale of our Autocentres business, the ongoing demand for our Halfords Mobile Expert Vans, and by recent staycation trends.
“Although our cycling business is currently impacted by the considerable disruption in the global supply chain, as the UK’s largest cycling retailer we are well positioned to adapt and to serve our customers, and we remain confident in the long-term outlook for the cycling market.”
Shares fell 1.7% following the trading update.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said of the cycling performance: “Not being able to offer the right stock, or enough of it, is inevitably putting a lid on progress in the division.
“These are unlikely to be resolved soon. The other thing to keep in mind is that staycations are likely going to become less popular as and when the world gets back to normal. What this will mean for sales in the next summer season is yet to be seen.”
