Next sees store sales rebound post-lockdown but online takings sag

High street fashion stalwart Next has seen sales continue to grow though online shopping has dipped as more customers return to stores.

Releasing a trading update, the group said total full-price sales in the 13 weeks to the end of April were up 21.3 per cent on the same period a year ago, although online sales fell by 11 per cent.

Web-based sales had been boosted in the comparable period last year due to Covid lockdown restrictions being in place.

Conversely, store sales leapt 285 per cent on the same period a year ago as a result, Next added.

However, when compared on a three-year basis - the last period before the pandemic hit - sales in stores remain down by 8 per cent.

The high street bellwether did not downgrade its forecasts as a result of further inflationary pressures.

Chief executive Lord Simon Wolfson said in March that the company is expecting to increase prices by an average of 3.7 per cent over the half-year to July.

He said pricing is expected to rise by an average of 8 per cent in the following six-month period, with fashion set for a 6.5 per cent increase.

An example of the Next summer 2022 fashion line-up. Picture: Next plc

The group previously said it would take an £85 million hit in sales by shutting its operations in Russia and Ukraine, knocking profits by £18m for the year.

Steve Clayton, HL Select fund manager, noted: “What Next haven’t said is more important than what they have.

“Markets were concerned that the group would be struggling with costs and availability of product, putting margins under pressure, even before customers struggled with the squeeze on their own incomes. Instead, the company have reiterated their guidance from March, suggesting that their cost controls are succeeding.

“Customers look to be accepting the price increases the group are putting through, rather than leaving the stores empty-handed.

“Next’s strength of cash flows leaves them far better placed than most retailers to continue prospering even when times get tough. And they certainly are tough right now.”

He added: “Next remains the retailer best placed to continue to thrive, both on the high street and online.”