Next today said its pre-Christmas sales “significantly” beat expectations as it unveiled a 21% boost to online sales in the run up to Christmas. But it warned the trend was unlikely to continue into the next quarter as wages remain subdued.
Online sales rose by 21% between November 1 and December 24, compared to the same time last year, while store sales were up by 7.7%, lifting total brand sales for the period by 11.9%.
So far in the year to date, Next sales have grown by 5%, thanks to a 12% boost from online, and the fashion retailer is now predicting pre-tax profit growth of between 10% and 12.6% to between £684m and £700m.
Next said the improvement in Christmas business came following improvements in its knitwear, nightwear and gift ranges as well as rising consumer faith in online deliveries.
“Increased confidence in online deliveries meant that more customers continued to trade with NEXT Directory right up to the weekend before Christmas,” said Next in today’s trading statement.
However it said the trend of strong growth was very unlikely to continue in the first half of the new year.
“The problem of little or no growth in real earnings looks set to persist for some time,” it said, “and we cannot see any reason to expect a significant increase in total consumer spending in the year ahead.” If growth brings rising interest rates then, it said, that could hit spending for those with mortgages.
The retailer also announced a special dividend of 50p per share.
