Car parts to bicycles retailer Halfords has underlined how nervous consumers are about the contents of the forthcoming Budget amid continued pressure on sales of big ticket items.

The company said uncertainty about chancellor Rachel Reeves’ plans for the Budget she will unveil on October 30 had compounded the challenges caused by continued inflationary pressures in the economy.

While the surge in inflation fuelled by the recovery from the pandemic has eased in recent months, the group has found that consumers have kept a tight rein on spending.

Chief executive Graham Stapleton said: “Consumers remain cautious in their discretionary spending compounded by uncertainty around the contents of the upcoming Autumn Budget.”

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In an update on trading in the 26 weeks to September 27, Halfords noted that caution has been evident in sales of both car parts and bicycles.

“Tyres remained challenging with price-conscious customers trading down into budget ranges,” said the group.

It added: “Leisure Cycling remained challenging.”

The update adds to the evidence of continued pressure on consumer spending provided by the likes of upmarket retailers Mulberry and Burberry in recent weeks.

Halfords highlighted a sharp decline in sales of consumer tyres and cycles in its annual results announcement in June.

The group said then: “Market volumes in Cycling and Consumer Tyres ... declined year-on-year, worse than industry expectations. These markets remain depressed versus pre-Covid, with bike volumes down c. 30% and tyres c. 14%.”

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Sales of bicycles boomed during the pandemic as many people took up or rediscovered cycling.

In recent months Halfords has become more reliant on enthusiasts for business.

The group said its ‘performance cycling’ business continued to outperform in the first half during which it enjoyed a positive reception for new premium bike ranges.

Cycle sales and services account for around 20% of Halfords’ revenues.

The group has mounted a push in recent years to increase the share of services-related business in its revenues.

It offers mobile tyre-fitting services from vans and operates autocentres.

Halfords expanded in Scotland through the £62m acquisition of the Glasgow-based owner of the National Tyres and Autocare business in 2021.

The group bought Ayr-based McConechy’s Tyre Service for £8.5m in 2019.

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Mr Stapleton said: “Our services and B2B-led strategy has supported Halfords’ growth despite two of our core markets remaining significantly below pre-Covid levels.”

The autocentres business achieved strong growth in services, maintenance and repair activity in the first half.

However, Halfords said “high levels of technician wage inflation persisted”.

Halfords launched a cost cutting drive to try to offset the impact of inflation.

The group said it is on track to deliver £30m of targeted full year savings to mitigate around £35m of expected inflation.

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The group said total sales fell by 0.1% on a like-for-like basis in the first half.

Labour ruled out increases in VAT, income tax and employees National Insurance in the manifesto for its successful general election campaign.

Pundits have predicted that Ms Reeves will increase capital gains tax and the rate of national insurance paid by employers. Either move could impact on spending by companies and consumers.

Mr Stapleton said investment in Halfords’ Fusion concept would help support growth by optimising the way the group provides services from its varied operations. It has been trialled successfully in Colchester and Halifax.