“Cold Christmas” boosts Next’s online sales

Next, the Enderby retail giant, has posted a revenue hike of 1.5% over the Christmas 2017 period – but its high street stores continue to struggle.

In-store sales dropped by 6.1% in the run-up to Christmas, with online providing a 13.6% boost to revenue. Full-year sales to 24 December reveal a worsening high street trend for Next, with full-price revenue down 7.2%, while online was up 10.4%.

A statement from Next this morning (3 January) said: “We believe part of this [online] improvement has been down to much colder weather leading up to Christmas.”

Despite the high street woes, Next is upgrading its full-year profit guidance slightly to £718m to £732m.

Richard Lim, chief executive, Retail Economics said: “These results highlight the relentless shift towards online spending with high street stores remaining in desperate conditions. The cooler weather is likely to have played a helping hand but these results set the tone for a tough Christmas.

“On the one hand, the aggressive growth of the more nimble, pure-online players is radically changing the competitive nature of the clothing sector. On the other, the prolonged frenzy of promotions since Black Friday, against a backdrop of rising sourcing and operating costs, is decimating profit margins.

“The length, breadth and depth of discounting this season has been astonishing. Just how much damage all of this discounting has inflicted on gross margins will be under close scrutiny.”