Following the release of Next’s unscheduled trading update, Emily Salter, lead analyst at GlobalData, offers her view: “In what seems to have become a trademark move for the retailer, Next has once again surpassed its own expectations, with full price sales rising by 9.3% in the first seven weeks of its Q2 FY2023/24, a sharp contrast to its previous guidance of a decline of 5%. It has also increased its full year guidance from a 1.5% fall in full price sales to a 1.4% rise.
“Next has attributed this unexpectedly positive trend to the warm weather, in contrast with the cool and wet spring seen in the UK, as well as the timing of annual salary increases. Even though the retailer seems to be in a unique position where it is continuously able to surpass its own forecasts, this is indicative of the surprising resilience of the UK retail market – with GlobalData forecasting non-food spend to grow by 0.4% in the UK in 2023, despite the challenges of stubbornly high inflation and weak–albeit improving–consumer sentiment.
“Consumers have continued to spend, whether supported by any remaining savings they built up during lockdowns or by the proliferation of buy now, pay later schemes, and Next has been a beneficiary of this. With its wide range of brands giving consumers the options to trade up or down, and its leading online proposition and credit options, it has retained shoppers so far in 2023, and this looks set to continue.”
