Halfords pledged to step up its promotional activity yesterday after reporting a sharper drop in like-for-like sales over the last quarter.
Shares in the retailer dropped nearly 9 per cent to 408p after the group highlighted a tough market for sales of satnavs and a disappointing performance in its cycles department as it posted a 6.3 per cent decline in like-for-like sales at its retail estate in the quarter to 1 October. This compared with a 4.5 per cent drop in the previous three months, although Halfords said it still expected to grow half-year profits by about 12 per cent to between £67m and £69m.
It remains cautious about the trading environment and said it would re-invest recent margin gains into increasing its promotional stance.
One area of focus is likely to be in cycles after a "relatively disappointing" 1 per cent drop in like-for-like sales over the quarter.
It blamed the performance on delays in the launch of new cycle ranges and on increased levels of competition as it failed to take full advantage of a UK market that "remains attractive and continues to grow".