Comment: Next resilience | house prices build

Martin Flanagan
Martin Flanagan
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THIS is becoming rather predictable: fashion retailer Next keeping its nerve by resolutely declining to be panicked into price promotions in the run-up to Christmas, and being rewarded with a decent lift in sales in happy contrast to much of a discount-frenzy high street.

The company has made a policy in recent years of only launching price promotions on Boxing Day, whatever is happening to trading in the weeks leading up to the festive season.

Admittedly, Next has been helped again by the stronger performance of its online and catalogue business compared to the turkey-and-two-veg high street stores operation.

But the company is hardly alone in that. There has been significant cannibalisation in the wider retail sector over the past few years as businesses get greater growth from a lower base in their internet sales, often at the expense of pallid sales on the shopfloor.

Next chief executive Lord Wolfson revealed yesterday that, while sales in its stores edged up 0.5 per cent in the period from late October to Christmas Eve, the Next Directory online and catalogue division saw sales growth of 7.5 per cent (and 13 per cent in the financial year to date).

It is impressive and resilient stuff. Wolfson’s counterpart at Marks & Spencer, Marc Bolland, would only be human to look with some envy at the performance.

But Next does start with some advantages over its main rival. For one, it has a neater demographic, looking to focus on 20- and 30-somethings with its clothes offering. M&S, with its far longer history and place in the public consciousness, has a much wider customer demographic to cover – it has to be sleek enough for younger consumers, but also not alienate a strong over-50s customer base by going too avant-garde.

Next also tends to have smaller, more navigable stores than M&S, and no complication of a major food offering as well. And whereas M&S seems to have been in some sort of ­permanent Middle Britain evolution/revolution since the late 1990s, Next has gained kudos and credence from a settled template.

Under Wolfson, the business is neither maverick or gimmicky. It does the simple things well, customers know what they will get and at what price they are likely to get it.

Yes, there are hiccups down the years, such as the group’s warning of the impact on sales of a balmy autumn this year, and the occasional stocking or destocking issue that affects all the main clothiers.

But Next’s achievement has been to evolve over many years now into a reliable stalwart in what has not infrequently been a helter-skelter ­retail sector as shopping patterns have changed for systemic as well as cyclical reasons.

It has handled both good and ­difficult economic times with some aplomb.

Dinner party chat still all about house prices

IT SPEAKS volumes about the overheating of the housing market that December’s seemingly substantial 
7.2 per cent rise in UK house prices was the lowest annual increase since November 2013.

When we are even vaguely sniffy about a 7 per cent jump in house prices, it makes it seem even more likely that a lot of young people are going to be living with Mum and Dad for a lot longer than those parents had ­envisaged during all those years spent regaling (or boring) dinner parties with how their homes had increased yet again in value.