Next posts festive sales rise as CEO sees future in high street

Next said full-price sales in the 54 days to December 24 increased 1.5%, ahead of expectations, with part of the improvement down to much colder weather leading up to Christmas.

The group saw online sales jump 13.6% in the period, helping mitigate a 6.1% decline in high street sales.

As a result, Next has increased its full-year profit guidance by £8 million to £725m, although the figure is still a long way off last year’s £790.2m.

Boss Lord Simon Wolfson told the Press Association that declining in-store sales are not a death knell for the high street.

“Retail will remain challenging and the shift from retail to online will continue, but half of our online orders are delivered to a store, so this is not the end of the high street as some people have said.”

However, he added that Next will look to reduce costs by renegotiating rents with landlords and controlling wages and man hours.

The more upbeat trading update will come as a relief to the retailer, which like its peers has been hammered by rising costs linked to the Brexit-battered pound and the resultant collapse in consumer confidence.

But the retailer warned that challenges remain.

“Many of the challenges we faced last year look set to continue into the year ahead.

“Subdued consumer demand driven by a decline in real income, the increase in experiential spending at the expense of clothing, and inflation in our cost prices remain challenges for 2018,” Next said.

However, the firm added that it believes “some of these headwinds will ease” through 2018, with inflation falling to 2% in the first half and disappearing in the second.

The retailer expects total full-price sales this year to nudge up 0.3%, rising to 1% next year.