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UPDATE 1-Halfords customers cut back on accessories
April 5, 2012 / 7:09 AM / 6 years ago

UPDATE 1-Halfords customers cut back on accessories

LONDON, April 5 (Reuters) - Bicycles to car parts retailer Halfords said it expected to post 2012 pretax profit broadly in line with revised forecasts but well down on previous years as consumers cut back on non-essential services.

It said it also expected the consumer environment to remain challenging in 2013, especially for the motorist.

The group, which trades from 467 Halfords stores and 260 Autocentre sites in Britain and Ireland, said it expected to post profit of between 90 million pounds to 93 million pounds, in line with recently downgraded forecasts.

In the last 13 weeks, stores in Britain and Ireland open more than a year posted revenue down 2.3 percent, as customers cut back on car accessories, audio devices and car cleaning products, but spent on bicycles and essential maintenance.

The group’s online service performed poorly, with weak sales of Sat Nav devices and child safety products. Its shares were down 4 percent.

Retailers have endured a tough few months and do not expect 2012 to be much better as British shoppers cut back on spending due to muted wages growth and government austerity measures.

Halfords in January reported a drop in sales in the run-up to Christmas, as mild weather made cost-conscious Britons even less inclined to spend money on maintaining their vehicles, and warned that profitability could be eroded more than previously thought.

On Thursday it repeated its prediction that 2012 gross margins would decline by 130 to 150 basis points, while retail operating costs were expected to be marginally below the earlier guidance.

“The UK consumer outlook for full-year 2013 is uncertain and the continued rise in fuel prices remains a concern,” Chief Executive David Wild said.

“Our actions have reduced input-cost inflation, but retailers face a rise in operating costs. While we have historically demonstrated an ability to alleviate these it may be more difficult this year.”

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