Next plays down sales cannibalisation fears

Next has dismissed fears over cannibalisation of sales as a result of its aggressive store expansion programme.

Some of the sheen was taken off stronger-than-expected interims last week by news that current trading had been affected by space growth.

Same-store sales for the six weeks since August 3 were up a meagre 0.8 per cent, mainly because 23 of the 286 stores that had traded continuously 'have been directly affected by new store openings'.

But chief executive Simon Wolfson said Next was prepared to take the attrition and is pushing ahead with expansion. 'If sales move back 25 per cent in one store, but overall profit goes up, then it is worth it,' he insisted.

'Like-for-like sales should not be the only thing we focus on, otherwise we would never open any stores,' he added.

Next was trading from 2.6 million sq ft (241,540 sq m) by the end of the first half, and plans to add a further 250,000 sq ft (23,225 sq m) by the end of the financial year.

Concern that the UK market may soon become saturated and that Next should look overseas was shrugged off.

'The real engine of growth for the next five years will be the UK,' said Wolfson.

For the six months to July, group sales were£1.12 billion compared with£944.8 million for the same period last year. Pre-tax profit rose to£123.2 million from£115.8 million.