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November 3, 2021

Next reiterates warning on sales slowdown over Christmas

UK clothing giant Next Plc has once again warned supply chain challenges including driver shortages and factory delays will lead to sales slowing down over Christmas.

By Hannah Abdulla

Next says labour shortages in transport and warehouses mean sales would only increase by 10% by the end of the year.

  • Next booked a 17% rise in full-price sales for the three months to 30 October
  • Online sales were up 40% for the quarter and up 49.5% for the year to date. Retail purchases were down by 6.1% in the quarter and by 28.8% for the year to date.
  • Full-year profit before tax is expected to come in at GBP800m.

“We do not expect sales to continue at the level seen in Q3,” the retailer said in its financial statement, attributing the slowdown to pent-up demand continuing to diminish and delays in its international supply chain being compounded by labour shortages in the UK transport and warehousing networks. This is despite stock availability improving.

The retailer warned in September it had been impacted by shipping costs and was preparing for staff shortages in the run-up to Christmas.

Commenting on the numbers, Richard Lim, CEO of Retail Economics, said: “The strength of its digital capabilities and online platform has underpinned another set of hugely impressive results. The business continues to be driven forward by a best-in-class online proposition, with its partnership with third-party brands driving an ever-widening customer base. The international business also saw strong gains as global economies continued to recover and demand rebounded.

“However, the outlook for Christmas remains more uncertain with disruptions to supply chains and labour shortages likely to cause challenges. The consumer backdrop has also softened significantly as inflationary concerns collide with rising concerns about the strength of the economy.”

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