Bicycle and automotive parts retailer Halfords saw its total group sales drop 2.1 per cent and margins cut in its third-quarter period, a trading statement released today reveals.

Despite increased popularity in bikes and strong trading at its Halfords Autocentre outlets, the retailer recorded a 4.8 per cent decline in like-for-like (LFL) sales in the UK & Ireland in the 13 weeks to December 30th 2011 compared to the same period last year.

In terms of LFLs, both its car maintenance and car enhancement divisions witnessed a revenue slump of 12.8 per cent in the period, despite comparisons being helped by the heavy snow seen in 2010, and in the full-year retail gross margin is expected to have receded by 130 to 150 basis points.

The last year has seen significant change at the retailer and rather than focus on the negative aspects of today‘s update, CEO David Wild highlighted the results of a number of new initiatives.

“The underlying performance of our business is encouraging as we develop Halfords in line with the changing needs of our customers,” Wild commented.

“Our expansion in auto aftercare is proving very popular. In store our Wefit offer reached record levels as we increasingly fit and attach the parts we sell. In Autocentres, at a difficult time for motorists, we are attracting new customers to our brand by offering great value.”

An increasingly health-conscious, or perhaps penny pinching, public have boosted cycling sales, with the division as a whole recording a 15.1 per cent uplift in LFLs as children‘s bikes proved particularly popular.

Halfords claims that car maintenance sales were actually dampened by the mild weather at the end of the year, due to a change in sales mix, and that without this impact the division would have reported a slight trading increase.

Nevertheless, the coming months will continue to be challenging for the business with further focus on Autocentres expected.

Wild added: “The economic outlook remains uncertain, but we are confident that our focus areas create the right platform for future growth.”