Following today’s release of Next’s figures for Q1, FY2023/24; Emily Salter, lead retail analyst at GlobalData, a leading data and analytics company, offers her view: “As consumer spend continues to defy expectations in the face of the continued cost-of-living crisis, Next has reported a more positive than anticipated Q1 FY2023/24, with total full-price sales falling by 0.7% versus its expectations of a decline of 2%. This outperformance of its own forecasts is a recurring theme for Next and implies that its performance going into Q2 may also be stronger than anticipated, but it has held its sales and profit guidance for the year.
“Despite Next’s resilience, it will have underperformed the total clothing & footwear market, which GlobalData forecasts to have grown by around 7% in the three months to the end of April. Although Next’s wide range of products and brands and market-leading online proposition have aided its fortunes, its performance has not been as strong as the likes of sportswear players and those that have still been recovering from the pandemic, such as Primark, which has also benefitted from its value proposition.
“At the end of April, Next announced that the launch of Joules on its total platform will be significantly faster than anticipated, with it now being able to launch in October 2023, instead of March 2024. This accelerated onboarding may mean that Next is more likely to take on more clients and potentially acquire more distressed retailers. However, the retailer should be careful to not to lose focus on its existing proposition, especially as it tries to place greater emphasis on the Next own brand to grow its market share in underdeveloped areas like women’s clothing and home. To do so, it will have to make investments such as increasing instore space for home and promoting good value for money while investing in trends in its womenswear, especially as key rival Marks & Spencer has significantly improved its reputation in both aspects in the past few years.”
