A standout Christmas performance from Next puts the retailer in line to rival Marks & Spencer’s profitability this year.
After sales rose 11.9% over Christmas, Next boss Lord Wolfson has lifted profit guidance to between £684m and £700m.
Next’s refusal to discount ahead of Christmas clearly served it well as others lost their nerve and cut prices, taking a margin hit as a result. The ability to hold out on price of course reflects the provision of product that whet shoppers’ appetites.
Next also benefited from its multichannel model as the Directory home shopping division led the way with a 21% advance in revenues.
But surely one takeaway from Next’s Christmas performance is that the middle market is far from dead – a point of view expressed after Debenhams’ profit warning and the strong showing of more upscale retailers such as House of Fraser, and that will no doubt be repeated when retailers at the value end of the spectrum, such as Primark,report.
Next is nothing if not middle-market. And its success is evidence that an efficiently run retailer with the right product can succeed in the mass market – the part of the market where by definition most consumers probably sit. It all sounds so simple. But, as some other retailers know only too well, it is anything but.