Budget uncertainty slams the brakes on Halfords as customers rein back their spending

Halfords has warned that customers are hesitant about spending due to uncertainty over the Budget.

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

Halfords, which has 377 shops and 546 garages, said there were ‘pockets of improving consumer sentiment’ but customers were still hesitant to spend on ‘big ticket, discretionary purchases’.

Chief executive Graham Stapleton said: ‘Consumers remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming Budget.’ 

He also said ‘price-conscious’ shoppers had switched to budget tyre ranges.

The group was affected by the UK’s wettest spring since 1986, which deterred shoppers from visiting stores.

Despite sluggish sales, Halfords shares rose by 10.7 per cent, or 15.2p, to 157.2p yesterday as investors acknowledged it had been up against a hard-to-beat performance the year before.

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

He said earlier this month that a lack of clarity over the Budget had driven ‘continued caution in discretionary spending’, with households ‘wanting to be clearer about what’s going to happen next’.

Chancellor Rachel Reeves has promised not to hike taxes for ‘working people’ but there has been confusion over what this means. 

Speculation is growing she may target a rise in employer national insurance – even though economists point out that the increased costs are highly likely to be passed on in the form of lower wages. 

Businesses have also accused Labour of talking down Britain instead of giving the City reasons to be positive about economic growth. Surveys suggest the doom and gloom has been taking its toll on consumers too.

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

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

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