Car part and cycle specialist Halfords today posted a “robust” fourth quarter performance. Chief executive Matt Davies speaks to Retail Week.
Retail Week: Halfords posted group like-for-likes up 0.4% in the 11 weeks to March 29, was this a good result?
Matt Davies: It is a resilient performance given the overall retail climate.
Car maintenance performed really well partly as a result of the freezing conditions but also due to a lot of focus and improvement in the fitting service.
More and more people are realising that if they need to change their battery not only can you buy it at Halfords we can fit it for you. And this fitting service has increased 40% year-on-year, which is really strong.
Having said that, cycles have been impacted and [the weather] has delayed the start to the cycle season.
The rise in car maintenance has helped offset the fall in cycle sales, do you think Halfords benefits from this spread of products?
In this particular quarter it has been the case but not throughout the whole year. We now need the weather to warm up and for people to comtemplate buying a bike.
But in the period we did record that within premium bikes such as the Boardman we are seeing good strong growth which supports our increased authority. Meanwhile for cycle accessories we have put 1,000 more SKUs online and online sales are up 26% year-on-year.
The big launch of parts, clothing and accessories is later this year, what should we expect?
It is mainly about online and providing Halfords with a compelling accessories offer. We are aiming to launch it over the summer. There will be thousands of products that are pretty much the core accessories brands, such as Adidas.
We have a really strong delivery proposition and [customers] will be able to collect accessories in their local stores. So that’s where we feel we have a compelling advantage against pure play accessories retailers. A lot of people find it a hassle to wait in for deliveries, so it is a powerful tool.
Will online be the key focus in your strategy?
In terms of online we have to make sure the business is well-placed for the digital future and we have done good work to date. Online represents 10% of all sales and approaching 90% of online orders are collected in store.
You were in discussions with fulfilment firm Shutl to enable Halfords to offer speedy deliveries of 90 minutes. Have those discussions progressed?
Quicker deliveries through Shutl will not be a huge focus for us given the value of other markets. It is probably a bit lower down the chain.
Halfords has previously mentioned that it may reduce store sizes due to its growing online offer. Is this still the case?
Overall the strategy around property we will address in May. We significantly benefit from the store estate. The challenge for the business is to work out ways of utilising space. The focus is on our three strategic pillars and there is a lot more we can do across the pillars to support growth.
You mention that fleet sales at your Autocentres are under pressure. Why is this?
We are really seeing a change in the mix in terms of company cars. There is a small rise in [the use of] fleet cars, but because they are new it means there is lower demand for MOTS and with less company cars this has impacted the fleet business.