Online sales overtake in-store revenue at Next
Leicester-based retailer Next has seen its high street sales and profits slump yet again.
In its half year to the end of July, Next saw physical store sales drop by 5.5% to £874.3m – overtaken by online revenue which leapt by 12.6% to just over £1bn.
Overall, profits at the firm rose by 2.7% to £319.6m.
Next said this morning that it expects its full-year profits to be around £725m – up 0.3% on last year.
Analyst Retail Economics said: “In the context of such a challenging market, these are solid numbers. The impressive growth of online sees the retailer ahead of the game, benefitting from the vast investment in digital and the impressive omnichannel proposition it offers.
“Shoppers expect to seamlessly bounce across physical and digital channels, often at the same time, choosing a blend of digital and in-store experiences that match their needs and rising expectations. The retailer has successfully repositioned its business to meet this new reality, evidenced by the majority of its sales now occurring online.
“Store profitability remains under pressure as spiralling business rates and labour costs have eroded their margins. But the purpose of the store is rapidly evolving from mere distribution hubs to media channels which stage meaningful experiences, support online sales and build the brand. Old metrics like ‘sales per square foot’ have been resigned to the history books.”