Halfords’ boss has admitted the retailer will raise prices on bikes “modestly” due to the currency fluctuations caused by Brexit, but argued the business is in a stronger position than competitors.

Speaking to media after revealing a better-than-expected 7% rise in third-quarter retail like-for-likes today, chief executive Jill McDonald said: “We are doing everything possible to keep price increases away from customers.”

But she added: “It’s inevitable over time that we will have to move some prices. We will have to move modestly.”

McDonald said some competitors had already raised retail cycle prices by up to 15%. The plunge in sterling has meant pressure on cycling retailers, as the majority of bikes are sourced in US dollars. Some tech products that Halfords sells will also be affected.

However, McDonald, who refused to be drawn on exactly how much its prices would rise, said: “We are in a much stronger position to resist price increases than competitors. The majority of bikes we sell are own-brand so we have control over the supply chain.

“We have also hedged, whereas smaller independents will not have been able to hedge against currencies.”

On Christmas trading, McDonald said that the week leading up to Christmas was its “best ever” sales performance, driven by growth from new ranges.

And December 23 was Halfords’ highest online sales day.

Around a quarter of a million children received a bike bought from Halfords for Christmas, the retailer estimated. 

Halfords is also trialling a “store of the future” in Derby and McDonald said three more are planned across the country by mid-April.

The retailer also revealed today it has acquired a minority stake in UK tyre-fitting business, Tyresonthedrive.com, for £8m.

It will also pay a special dividend of 10p per share next month, with around £20m in total being returned to shareholders.

Halfords maintained its full-year profit guidance as despite a strong third-quarter sales performance it will miss some revenue in its fourth quarter due to the timing of Easter, McDonald said.