Halfords is a strong business with highly-engaged colleagues, a sizeable and growing services business, leading positions in attractive markets and a prudent capital structure and strong balance sheet.
These strengths also provide a solid foundation on which to build, but are not sufficient in isolation to provide a long-term, sustainable and profitable business nor counter some of the significant headwinds we face going forwards. The retail environment is ever-changing, with increasing competitive threats and more demanding customer expectations. After a detailed strategic review process we are clear that standing still is not a long term option.
We have chosen to accelerate investment in the business to become a much more differentiated, super specialist with an integrated, unique and more convenient services offer, and to focus on retaining customers for a lifetime. By doing so we will develop a business with long-term, sustainable growth prospects.
Firstly, we plan to significantly grow our Autocentre business. We know that our Autocentre garages are often not conveniently located. In many parts of the country, the time taken for a customer to drive to their nearest Halfords Autocentre is well over 30 minutes. Our insight shows that customers require a drive time of less than 20 minutes if they are to utilise Autocentre services. To reduce this drive time, we need more garages in more convenient locations for our customers. Via the acquisition of McConechy’s Tyre Service, we have already made good progress with this part of our plan, increasing the size of our site footprint by about 20%. Looking into the future we believe there is the potential for 550 Autocentres across the UK and Ireland, which will bring our drive time in line with customers’ Expectations.
Our Mobile Expert vans have proven that there is sufficient customer demand for mobile services delivered at a location convenient to them. Encouraged by the results of our trial, we plan to grow to 200 vans over the next 3–5 years, giving us national coverage and providing most UK consumers with access to Halfords Mobile Expert services. Our acquisition of Tyres on the Drive, a mobile tyre-fitting business, has significantly accelerated the roll-out of our Mobile Expert proposition giving us access to both a large number of vans and best-in-class software to drive growth of our mobile services business. In addition to this, we will increase investment in the provision of WeFit and WeCheck services in our Retail stores, for example the fitting of wiper blades and headlight bulbs. This will be enabled by a best-in-class customer contact strategy and the redeployment of labour in store to provide more WeFit trained colleagues to better service customer needs.
As well as focusing on our customer strategy to create a more unique and differentiated, super specialist business, we will be equally focused on ensuring we have an efficient, cost effective and cash generative business. We will be targeting cost savings and cash efficiencies from property, product, supply chain and in-garage processes, along with synergies from greater integration of our businesses across the Group.
These operational efficiencies will be re-invested into: