Next hails recovery as homeware sales boom
The boss of Next said that Britons were feeling increasingly confident about Britain’s recovery from the pandemic as they hit the shops.
The remarks came after Next lifted its profit targets for the year after a boom in online sales of garden furniture, bedding and curtains. The firm reported £75m more in sales than predicted for the 13 weeks to May 1.
Sales for the period were only 1.5pc below the same three months in pre-pandemic 2019. Next had originally expected a 10pc fall.
The better than expected performance prompted the FTSE 100 retailer to raise its profit targets by £20m to £720m for this financial year.
Lord Wolfson, the long-standing chief executive, said: "Not only is there pent-up demand from people who haven’t bought a lot of things for a while, there is a lot of pent-up savings."
He added that since shops reopened, sales have been "much better than expected" suggesting that consumer confidence was improving.
"I don’t think that’s indicative of sales going forward, but I do think that’s indicative of the health of consumer finances and to a degree underlying confidence of the consumer. If they were negative about the outlook, they were concerned about their jobs, they wouldn’t be spending in shops," Lord Wolfson said.
Next's upgrade was largely due to strong online orders, which jumped almost two thirds over the three months.
Lord Wolfson said it was not the case that almost all lost store sales were transferred online, with shoppers buying homeware, third-party brands and childrenswear.
Store sales surged after it reopened shops across the UK from April 12 in the most recent easing of lockdown restrictions. Total full-price sales rose by 19pc over the past three weeks as a result.
Sales from physical stores increased by 2pc against pre-pandemic levels, but growth was still significantly driven by its online business, which reported a 52pc lift.
However, the company said that it expected the surge in sales to ease back, which was why it was not upgrading its sales target for the year.
"Evidence from last year suggests that this post-lockdown surge will be short lived, and we expect sales to settle back down to our guidance levels within the next few weeks," the company said.
It is still expecting total sales to rise by 3pc over the year, with retail store sales falling by a fifth due to the impact of virus curbs.
Shares rose 2.4pc to £83.24 in afternoon trading.
