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Next boosted by online Christmas sales

Next has reported a rise in online sales for its Christmas trading period. For the two months 28 October – 29 December, the high street retailer stated online sales rose 15.2% year-on-year, while store sales fell 9.2%. Next said strong sales in the three weeks prior to Christmas, as well as positive revenues during the October half-term holiday “made up for disappointing sales in November”, which impacted much of the UK high street.

Overall, full-price sales were up 1.5% for the period, while the retailer expects a sales growth of 3.2% for the full year, which it will report on in March.

Back in September, Next CEO, Simon Wolfson, described how the retailer had reached an online tipping point, where eCommerce sales balanced out the decline of in-store sales.

In today’s trading statement, Next reported a slight dip in its profit guidance for the year, down 0.6% from £727 million to £723 million. That £4 million reduction in margin was blamed on the higher sale of seasonal gifts and beauty products (£1.5 million), as well as the increased operational costs associated with the rise in online sales (£2.5 million). As well as logistics costs from its eCommerce operations, Next has recently implemented RFID technology across its store estate to cope with the demand for online shopping, using its accurate stock inventory to fulfil online orders from stores.

The retailer used this trading statement to reiterate the market uncertainty caused by Brexit.

Anusha Couttigane, principal fashion analyst EMEA at Kantar Consulting, commented: "While some may believe that Next's results suggest retail in the UK has avoided a slump in the wake of low consumer confidence, slow November sales and economic uncertainty, Next historically outperforms its peers, especially during the Christmas trading period. Moreover its multichannel infrastructure is particularly robust, enabling it to offset underperformance in physical spaces with more success than rivals."