Halfords has said difficulties in hiring enough car mechanics was partly to blame for a profits warning.
The car parts-to-bicycles retailer said a lack of technicians meant sales at its Autocentre motor servicing garages were focused on less-profitable services and this was having an effect on overall profitability. It called on the government to do more to encourage people to train as mechanics.
The group now expects to make annual profits of £60m at most, down from as much as £75m previously hoped for.
Graham Stapleton, the chief executive, said: “Like many businesses, one of the biggest challenges we face is recruitment. We can’t get enough qualified technicians into our garages to meet demand. There are parallel issues in many other parts of the economy where large skills gaps are opening up.”
Halfords said older workers leaving the workforce was another contributing factor.
In a quarterly trading statement, Halfords also said underlying sales of bicycles and cycling gear were down 8.6%, marking the end of a boom during the pandemic lockdowns. Sales of car tyres remained 13% below pre-Covid levels as customers deferred costly jobs and more expensive discretionary purchases due to pressure on their household budgets from energy and grocery bills and rising mortgage rates.
The company said it expected “a deeper decline in demand for more discretionary high-ticket items”.
Its shares fell 19.5% to 174p after the profit warning on Thursday.
Underlying sales for the group rose 4.6% in the three months to 30 December, well behind the average rate of inflation, which has exceeded 10%. The growth was led by a 14.6% rise in sales at Halfords autocentres.
Stapleton called on the government to extend the apprenticeship levy so that it could be more easily spent on training existing employees on new technologies such as electric vehicles.
He said young people from disadvantaged backgrounds were put off taking up apprenticeships because doing so could affect benefits going to their parents such as child benefit, housing benefit or council tax discounts. He also suggested the government could help fund an awareness programme to draw new types of recruits to the industry, such as women.
He said Halfords wanted to fill 1,000 new roles and was trying new tactics such as later-life apprenticeships and trying to bring in more young people.
“With unprecedented demand in our motoring services business, we are particularly impacted by the nationwide skills shortage, with recruitment proving to be extremely challenging in the current labour market,” he said.