Next defies gloom and doom to post bumper festive sales

Subsequently, a wave of High Street firms defying economic doom and gloom led to huge sales over Christmas.

On a positive day for UK retail, the company raised its profit forecast for the year after sales were £66m higher than expected in the nine weeks to December 30.

It came as Boots, Greggs and B&M Bargains all reported bouncy Christmas sales – allaying fears Britain’s High Street had suffered a festive carnage.

Meanwhile, new figures from the British Retail Consortium (BRC) showed December visitor numbers were the highest since Covid hit.

Next CEO Simon Wolfson said ‘Christmas sales were better than we expected’ and pointed to ‘light at the end of the tunnel’ for households facing significant price increases.

He added: “The numbers speak for themselves that people’s finances are better than they expected.

“I think that’s partly because employment remains very strong.”

Wolfson had previously warned of a 2 percent drop in sales during the crucial nine-week period as cash-strapped customers faced skyrocketing bills and higher prices.

But at Next, they were 4.8 per cent higher than the same period a year earlier, representing an additional £66 million in revenue.

As a result, the retailer raised its profit forecast for the 12 months to the end of January by £20m to £860m.

Shares in the business rose 6.9 per cent, or 420 pence, to 6518 pence, with High Street rivals also on the rise.

Marks & Spencer rose 3.4 percent, Primark owner AB Foods 4.3 percent better, JD Sports 3.1 percent better and House of Fraser and Sports Direct owner Frasers Group rose 3.4 percent.

Wolfson said the shocking jump in sales was caused by “a dramatic boost” in demand for coats, jackets and other cold-weather products as temperatures plummeted.

He also suggested some respite was in store for shoppers, with price increases peaking at 8 percent this spring and summer, before declining to 6 percent in the fall and winter.

“I think that’s very important for the British economy,” he said.

‘Because although next year is going to be difficult, we see that the seeds for recovery have already been planted for next year.’

He added: “When I look at the things that are comfortable, I think the strength of employment and employment in the UK is one of the things that is likely to moderate the effect of prices rising faster than the wages. ‘

Despite the green shoots, Next lowered its forecast for the coming year as customers face rising energy bills, mortgage rates and prices at the till.

The usually cautious retailer said sales will fall 1.5 per cent in the year to January next year, with a profit of £795m.

Begbies Traynor partner Julie Palmer said: ‘Underpromising and overdelivering has become a hallmark of Next and the retailer has once again exceeded expectations with its Christmas trade.

“Under Lord Wolfson’s leadership, the company has a reputation for being a gauge of what’s really going on in the economy. The sometimes cautious forecasts are one of the most reliable guides to the future.’

The BRC said shoppers are returning to the high streets in droves.

While the number of visitors to high streets, retail parks and shopping centers was still below the December 2019 level last month, the total number of visitors was 15.1 percent higher than a year earlier.

BRC boss Helen Dickinson said train strikes and falling temperatures kept many customers at home.

But she hailed a “significant improvement” from the previous two years, when the pandemic turned shopping streets into ghost towns.