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Business News

Next warns of sales slowdown but says stock availability has ‘improved’ ahead of Xmas


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Next has warned it expects sales growth to slow ahead of Christmas as household budgets come under pressure but reported an improvement in supply chain disruption that has limited stock.

The fashion-to-homewares retailer’s chief executive, the pro-Brexit Tory peer Lord Wolfson, had urged ministers in September to take “decisive action” by relaxing immigration rules to tackle the shortage of workers hampering the economy.

The company had complained about a lack of staff in crucial roles, including haulage, but revealed on Wednesday that it still saw a 17% leap in full price sales during the thirteen weeks to 30 October versus two years ago.

Lord Wolfson is Next's chief executive. Pic: Next
Image: Lord Wolfson has accused the government of not using the freedom to control immigration to the UK’s advantage

The performance was led by its sprawling online operations as store sales across the UK and Ireland during the third quarter were down almost 29% on the same period a year ago.

Next said that full price sales over the past five weeks were 14% higher – better than its forecast of 10% – but it still expected the rate of growth to slow to 10% in the final three months of its financial year.

“We are maintaining our Q4 full price sales guidance at +10% and full year profit before tax at £800m”, Next said.

The retailer said the lack of an upgrade was due to the fact that inflation is rising as a consequence of rising bills for things such as fuel and household energy and that was likely to “moderate demand for more discretionary purchases”.

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“The effects of pent-up demand (from COVID restrictions) are likely to continue to diminish.

“Stock availability has improved but remains challenging, with delays in our international supply chain being compounded by labour shortages in the UK transport and warehousing networks.

“However, to date, stock limitations appear to be offset by strong underlying demand”, Next reported.

 Sky News

© Sky News 2021

Written by: Rother Radio News

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