Consumers are beating the credit crunch by steering clear of car showrooms and repairing their existing vehicles instead, Halfords said yesterday.

Nick Wharton, the bicycle and car parts retailer's joint managing director, said that the company was beginning to benefit from customers holding on to their ageing cars.

He said that the trend had led to a surge in demand for essential products such as car batteries, oil, seat covers, and windscreen wipers, which had helped to ensure that sales continued to grow. Mr Wharton added that the trend made the business less vulnerable than many other retailers to the consumer spending slowdown.

In recent months there has been a marked slowdown in car and general retail sales as consumers struggle with higher energy and food bills and as access to cheap credit has dried up. The retailer has noticed that customers not buying new cars are looking to improve the vehicle they already own, with new stereos and satellite navigation systems - the sort of extras that might have come with a new car.

The company said that it was also benefiting from people abandoning their cars for some journeys and deciding to cycle instead.

Mr Wharton said that concerns over higher fuel and transport costs had resulted in customers increasingly choosing to pedal to work, leading to a resurgence in bike sales. The company said that health concerns and environmental motivations were also driving demand. “More recently, bikes have represented a good pay-back, replacing petrol or travel season-tickets,” he said.

Commuting and folding bikes have been particularly popular, with strong sales of racing bikes in recent weeks. Halfords is sponsoring ITV's television coverage in Britain of the Tour de France. Halfords sells about one million bikes a year, about a third of the British market, with its mainstream Apollo range the biggest brand in the country. Its specialist Boardman bike range is in such demand that there is a waiting list for the more popular models.

However, Mr Wharton said that management would not be complacent and that they recognised that this was not an easy time for consumers.

The company, also boosted by increased sales of camping equipment, beat City expectations, reporting sales growth of 1.7 per cent in the 13 weeks to June 27. Like-for like sales were flat at 0.2 per cent.

The retailer said that it was particularly pleased with the performance, which was achieved in comparison with an extremely strong previous year in which like-for-like sales in the first quarter increased by 8.4 per cent.

Moreover, it added that sales for the quarter would have been better, at about 3 per cent, if the company had benefited from a full Easter in the first three months of this year.

Halfords expects profits for the first quarter to be ahead of expectations because of healthy margins and cost-cutting. The company's shares rose more than 7 per cent, or 20p, to 296p, with City analysts highlighting the defensive nature of the business.

John Stevenson, an analyst at Shore Capital, said that Halfords was one of the few general retailers he expected to deliver year-on-year profit growth through the consumer downturn.

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