Budget uncertainty slows Halfords as customers curb spending

Halfords has warned that customers are hesitant to spend due to budget uncertainty.

The car and bicycle equipment retailer said sales fell 0.1 percent in the six months to September 27, with customers nervous about buying expensive products.

Halfords, which has 377 stores and 546 garages, said there were “pockets of improvement in consumer confidence” but customers were still hesitant to spend on “high value discretionary purchases”.

Chief executive Graham Stapleton said: “Consumers remain cautious in their discretionary spending, compounded by uncertainty over the content of the upcoming budget.”

It also said “price-conscious” buyers had opted for budget tire ranges.

The group was hit by the UK’s wettest spring since 1986, deterring shoppers from visiting stores.

Despite weak sales, Halfords shares rose 10.7 per cent, or 15.2p, to 157.2p yesterday, as investors acknowledged it had faced a tough performance to beat in the previous year. .

Stapleton’s comments on the broader consumer environment are consistent with those made by Sainsbury’s chief executive Simon Roberts.

He said earlier this month that the lack of clarity over the Budget had prompted “continued caution on discretionary spending”, and that households “wanted more clarity about what happens next”.

Chancellor Rachel Reeves has promised not to raise taxes for “workers” but there has been confusion over what this means.

Speculation is growing that it could point to an increase in employers’ national insurance, although economists say the increased costs are likely to be passed on in the form of lower wages.

Businesses have also accused Labor of belittling Britain rather than giving the City reasons to be positive about economic growth. Surveys suggest that pessimism has also been taking its toll on consumers.

A survey by Skipton Building Society found that 70 per cent of consumers admitted they were worried or anxious about what might be announced in the Budget.

A survey by market research firm GfK showed its main measure of consumer confidence fell to a six-month low in September.