Next sales growth cools off but online trade remains strong

Online sales have surged in recent months but trade in stores is struggling

Next has reported a 2 per cent rise in sales during the third quarter, as online growth managed to bolster the retailer against plummeting sales at its high street stores.

The group posted an 8 per cent decline in retail sales, against a 12.7 per cent increase in online sales.

In the year to date, total sales are up 3.7 per cent, Next said, with online rising by 14.8 per cent and retail falling 6.3 per cent.

The company said it still expects sales growth of 3 per cent for the whole year and is forecast to report annual pre-tax profit of £727m, a 0.1 per cent increase on last year.

However, shares dropped almost 5 per cent in early trading on Wednesday as sales growth slowed in the third quarter.

Laith Khalaf, senior analyst at Hargreaves Lansdown, put this decline down to the warmer weather in the first half of the year, which boosted trading at Next.

“More recently, an Indian summer stretching into October will have pushed back the need for scarves and mittens,” he said. “Nonetheless Next still remains on track to deliver its projected profits for this year.”

Mr Khalaf added: “With Christmas on the horizon we’re now approaching a crunch time for UK retailers, and in January’s trading statements we’ll get a good gauge of UK consumer appetite, and a roll call of winners and losers on the UK high street.”