Online sales drive Next festive cheer

Online sales rose by 13.4 per cent over the festive period.
Online sales rose by 13.4 per cent over the festive period.
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Retail bellwether Next has reported an unexpected boost to festive sales - driven by a strong performance online.

The clothing firm, the first to publish festive trading figures, said that online sales had risen by 13.4 per cent over the 54 days from 1 November to Christmas Eve - a ten per cent increase from the same time last year.

Overall, chief executive Lord Wolfson said in a trading statement that full price sales in the period were up by 1.5 per cent on last year, boosted, he claimed, by the cold weather.

The firm raised its profit forecast as a result of the better-than-expected performance, saying that profits were expected to rise by £8m to £725m - but still below the £790m in the 12 months to January 2017.

However, retail experts warned that the store, which has become increasingly reliant on internet sales and click and collect in recent years - particularly at its out of town retail park locations - may be hit with a flurry of returns in the New Year.

Leigh Sparks, professor of retail at Stirling University, said that consumers have this week begun to return purchases bought in the run up to Christmas.

He said: “If you look at the figures, they have clearly had a big growth in online. They are a very powerful brand and have a good delivery system, with good service levels. It is obvious that people have taken advantage of that.

“What we don’t know, it to what extent there will be physical returns. Today is the first day people in Scotland are back to work, while a lot of people across the UK have taken the rest of the week off and people are only just starting to get around to doing things after the holidays. It is a case of waiting and seeing what happens over the next few weeks.”

Next has suffered tough trading conditions in recent years, after a long period as one of the high street's strongest retailers, warning in 2016 that the coming 12 months was “toughest we have faced since 2008”, when the recession hit the UK's high street.

Lord Wolfson said: “Both channels experienced an improvement in sales, with our online business performing particularly well. We believe part of this improvement has been down to much colder weather leading up to Christmas.”

Retail consultant Mary Portas said: “Online is going to be about 30 per cent of our sales in the next five years and the big retailers who have invested in that during the past few years are starting to see the results, but it doesn’t bode well for the high street.”

Meanwhile, courier firm ParcelHero said today that more returns were flooding in at the beginning of this week than in the same period last year.

Head of consumer research, David Jinks said: "We have seen many more costly items returned this year than on Take Back Tuesday 2017. We think many people took an extra day’s holiday this year and today looks like becoming Wing-Back Wednesday as they catch up with returning unwanted gifts."

He added: "It also looks as if many more consumers are avoiding post office queues by sending items back through couriers - who will pick up their return items from their work, home or postal lockers."