Halfords sales slow amid high fuel prices Soaring fuel prices and a reluctance by budget-conscious motorists to maintain and improve their vehicles have continued to weigh on sales at Halfords. The car parts and bicycles retailer on Thursday said the relatively mild winter had dragged down demand for car maintenance and repairs over the past few months, a period that traditionally sees higher sales of replacement batteries and windscreen wiper blades. Over the 52 weeks to April 1, sales at retail stores in Britain and Ireland open more than a year fell 2.7 per cent, while revenues from car maintenance dropped 4.5 per cent. In spite of the slowing sales, Halfords reiterated that it expected to report pre-tax profit of £90m-£93m from revenues of about £861m in the 12-month period. In the previous year Halfords recorded pre-tax profit of £118m from revenues of £870m. David Wild, Halfords chief executive, said: "We have seen a decline in the discretionary side of car spending. Our online performance is a little disappointing, reflecting a decline in sales of satellite navigation systems and children's car seats. We anticipate the UK consumer environment to be challenging, especially as fuel costs continue to rise. Halfords said the introduction of an incentive-based staff payment system would result in a £12m jump in costs at its retail division, prompting analysts to cut their pre-tax profit expectations for 2013, with David Jeary at Investec and Philip Dorgan of Panmure Gordon downgrading their forecasts from £93m to £80m. Mr Dorgan said: "There will be reasonably large downgrades to current-year forecasts, although the company is signalling that the dividend is safe. We remain buyers, but the shares will react adversely to this news today. Halfords, which trades from 467 Halfords stores and 260 Autocentre sites in the UK and Ireland, has struggled in the economic downturn as cash-strapped consumers cut expenditure on their vehicles in response to rising fuel costs and a lack of disposable income. As a result, gross margins, which were about 54 per cent in the previous financial year, are expected to fall 1.5-1.7 percentage points for the year to April 1. One bright spot for Halfords has been bicycle sales and maintenance, as the higher fuel costs encouraged consumers to swap their cars for bicycles. Revenues at Halfords" leisure division, which includes bicycle sales, rose 5 per cent in the 12-month period and Mr Wild said the group was expecting a further boost from this summer's Olympic Games. The retailer also received a minor boost from the recent UK petrol supply scare, which was fuelled when Francis Maude, the cabinet secretary, suggested drivers should store fuel in jerry cans in their garages - a remark that prompted a 225 per cent jump in sales of fuel cans at Halfords. "The panic buying of jerry cans has subsided," Mr Wild said. I think customers are just really irritated by the fact that once again petrol has gone up in price. He added that some customers continued to defer car maintenance in an effort to save money. "Customers are putting if off, and in some cases they are making a mistake, because if you maintain your car, that reduces your fuel consumption," he said. Halfords shares were down almost 3 per cent, or 9.10p, at 306.30p in afternoon trading.