Next’s store sales and profits keep falling

Next’s annual sales and profits at its High Street stores have continued their fall of recent years, while its online business continues to grow.

Sales in Next’s stores fell nearly 8% last year to £1.95bn, while online sales rose by 14.7% to £1.92bn.

It said online was a “long-term threat” to its High Street business, but a “larger opportunity” for the group.

The retailer also said it could see “no evidence” that Brexit uncertainty was affecting consumer behaviour.

Overall, Next’s group pre-tax profits for the year to January were in line with expectations at £722.9m, a fall of 0.4%.

Annual profits at its High Street stores fell by just over 20%, while online profits jumped by nearly 14%.

Total group sales, including the finance division, rose by 2.5% to £4.22bn.

Next said 53% of its sales were now online.

It said the growth of online sales “represents a long-term threat to our retail business but potentially, a much larger opportunity for the group as a whole”.

Consumers ‘numb’ over Brexit

Chairman Lord Wolfson, a prominent supporter of Brexit, said the retailer could see “no evidence” that Brexit uncertainty was “affecting consumer behaviour in our sector”.

“Our feeling is that there is a level of fatigue around the subject that leaves consumers numb to the daily swings in the political debate.”

Julie Palmer, partner at Begbies Traynor, said Next “continues to impress”.

“The continuing success of its online and catalogue offering means the retailer has a significant advantage over its competitors, and continued investment in its online offering will guarantee future success.

“However it is not all plain sailing for this iconic retailer, with it suffering from a double whammy of falling High Street sales combined with higher staff wages which will continue to impact its financial performance. As such High Street store closures are on the cards in the coming year.”