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Next cautious as sales drop 6%

Next’s retail sales dropped 6% for the first half of the year as the retailer predicted no end to the economic slowdown.

Full price retail like-for-like sales fell 6% for the 26 weeks to July 26.

Total sales at the business were down 3.9% in the first quarter, hit by tough comparisons with the previous year, which was boosted by good weather. Sales were up in the second half by 0.2% giving a fall of 1.8% for the half year.

Sales at Next’s stores were down 3.1% for the period. The company said that it had significantly less stock going into the end of season Sale than last year, and that clearance rates were ahead of last year.

However, the company’s mail order business Next Directory reported a 2% increase in sales for the first half, boosted by a strong second quarter.

Next said that overall first half sales were in line with guidance given earlier in the year.

In the trading statement Next said: “We remain very cautious about the outlook for the second half and can see no reason for any improvement in consumer spending, indeed, the economic risk appears to us to be on the downside.

“We believe that continued year on year increases in food, fuel and mortgage costs will weigh heavily on our customers. We are there currently planning for retail full price like-for-like sales in the second half to be down by a similar amount to that of the first half.”

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