Next has reported a 0.3% drop in full-price sales in the six months ending July 2016 as shoppers increasingly search out bargains.
The high street giant said total brand sales were up 3% at £1.9bn but the 0.3% drop in full-price sales demonstrates the consumer’s increasing unwillingness to buy without a discount. Profit before tax dipped by 1.5% to £342.1m.
Directory sales fared better than retail sales in the period, Next said, which it attributed to improved stock availability, enhanced website functionality and continued growth from its LABEL multibrand site and from overseas.
Next CEO Lord Wolfson addressed the issue of the so-called “July bounce” when many retailers saw an unexpected increase in sales after the EU referendum result and what had been a difficult start to the spring/summer season due to poor weather, saying he did not believe it represented a change in consumer behaviour and was a result of shoppers buying during the Sale period.
“… full price sales in July remained subdued, so we do not believe that July trading represented any change in underlying consumer spending patterns. Trading since July, which to some extent may have been affected by the Sale, has remained challenging and volatile,” Wolfson said.
Wolfson added that the year so far had been challenging “with economic and cyclical factors working against us, and it looks set to remain that way until mid-October at the earliest.”
Another of the British high street’s bellwether retailers John Lewis announced its first half profit had dropped by almost 15% due to challenging market conditions.