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Next and Ocado record rises in sales, but plan for tough times ahead

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Next: stress testing for potential £1bn sales slump
Next: stress testing for potential £1bn sales slump
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Retailer results show modest rise in profit pre-Corona, but less certain times lie ahead

Results from some retailers are starting to trickle in today, revealing that before corona there were modest signs of growth, but that the pandemic is set to cut a swathe through those.

 

Grocery is set to do well, but others are stress testing how to cope with falls of up to 25% in sales.

 

Next stress-tests for the weeks ahead

Retailer Next has logged a modest 0.8% rise in profits to £728.5m in the year to January 2020, but is warning that it could hit a £1bn sales drop because of coronavirus.

 

The company is reported to have carried out stress-tests for falls of 10, 20 and 25% of annual turnover – equivalent to a fall in sales of £445m, £820m and £1bn respectively – to model what it does next.

 

However, Next boss Lord Wolfson confessed that there was “no way of predicting the extent that the effect coronavirus will have” on the business.

 

Ocado suspends delivery but sees results bounce

Ocado, which has just this morning suspended its online delivery service until the weekend to catch up on demand and change some of its online processes, logged a retail revenue growth of 10.3% as sales hit £441.2 million – helped by average orders per week increasing by 10.2% – for the 13 weeks to 1 March, driven in part by what CEO Melanie Smith says is a "large element of forward buying of ambient items”, but she warns that “there may be further disruptions ahead.”

 

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