Next has become the latest multichannel retailer to warn that warm weather could dent its sales – and profits. It is one of many retailers currently running online sales close to the start to the autumn winter campaign.
Next said in a trading statement today that warm September weather meant third quarter sales growth was slower, at 6%, than the 10% previously forecast.
While lost sales may be regained if the weather turns – and cooler August weather did lead to “several very strong weeks” – Next also said in today’s statement: “If this unusually warm weather continues for the full duration of October then we are likely to lower our full-year profit guidance range of £775m to £815m.”
Next’s weather warning comes days after John Lewis said sales growth had slowed in the week to September 20, when temperatures of up to 25 degrees celsius meant customers were “not in the mood just yet for buying cold weather products”. Its online sales growth in the week slowed to 12.7%, compared to the 22% the company had seen in the first eight weeks of the year. Total sales grew by 2% during the week, while year-so-far sales had grown by 8.1%.
Next is currently running a prominent sale, promising at least 50% off prices. The retailer is not alone. Marks & Spencer is also promoting a up to 50% off sale, Debenhams is promising up to half-price off in its clearance event, House of Fraser is offering up to 50% off in a one-day event, while Gap has sent out 30% off vouchers in a promotion that ends tomorrow.
Next warns of the ‘warm weather effect’ as sales growth slows
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