Halfords reported a fall in first half profits and announced the second phase of its transformation strategy, with an emphasis on using data to improve online and offline service.
The cycling to automotive equipment retailer said that it had come to the end of a three-year Getting into Gear investment in stabilising its foundations and improving service. Now, it said, it was moving into a second phase, a Moving up a Gear programme that will learn from customer data to improve customer service. It said that while it was now a “fundamentally strong business”, the job was not yet done.
The new strategy will see Halfords invest in customer data and insight in order to get the most from its lifetime customer value, focus on customer service, develop a seamless customer experience both online and in-store, and invest in its infrastructure for the future, with a view to improving both efficiency and fulfillment.
“After three years of investing to stabilise the foundations, improve service levels and grow sales, Halfords is now a fundamentally strong business, operating in markets with good growth prospects,” said Jill McDonald, chief executive. “However the modernisation process is not yet complete. Under the new strategy we will continue to invest to move from fixing the basics to enabling sustainable growth. There are a number of significant opportunities for further improvement, which include the leveraging of customer data and analytics, relentless innovation, a better shopping experience, enhanced customer service and services, and a fulfilment infrastructure for modern times. We look forward with confidence to growing Halfords over the long-term.”
The update came as the automotive-to-cycling equipment retailer reported sales of £533.5 million in the half-year to October 2, some 1.8 per cent up on the same time last year, or 1.7 per cent up on a like-for-like basis, which strips out store openings and closures. Retail sales alone grew by 1.4 per cent, while revenue from its autocentres business was up b 3.3 per cent. But pre-tax profits of £46.4 million, before one-off charges, were down by 5.9 per cent on last time, and down by 6.3 per cent after those charges. Online sales grew by 0.9 per cent to account for 12.1 per cent of total retail sales. Some 90 per cent of online orders were collected in store, “reflecting,” said the Halfords statement, “the importance of the physical store network to our overall offer.” At the same time home delivery sales rose by 34 per cent, helped, said Halfords, by the introduction of the Halfords eBay site in November 2014.
Cycling sales was the only area where retail sales slowed over the summer, which McDonald described as “disappointing”. She added: “Looking forward, there are plenty of reasons for us to remain confident that the cycling market will continue to grow over the long-term.”
At this time last year, Halfords turned in double digit growth following the relaunch of Halfords.com