SHOPPERS are “defying gravity” as they keep spending despite the cost-of-living crisis, the boss of Next said.
The fashion retailer enjoyed its third profit forecast boost in a year after it admitted its sales performance had wildly “exceeded our expectations”.
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Boss Lord Simon Wolfson said Next had improved its fashion ranges, cut costs and improved its warehouses and deliveries but admitted the strong performance was largely down to wage growth and the weather.
The figures revealed its sales had fallen by three per cent during a rainy March but jumped by ten per cent when the sun shone in June.
The chief executive, widely respected for his detailed analysis on the state of retail, admitted that he had been “overly cautious” about the health of the economy.
Recent wage figures show that people’s pay growth is no longer being eaten up by inflation.
Lord Wolfson said that after three years of pandemic drama, the weather would have a bigger influence on the company’s performance this year than how consumers felt about their finances.
As cost pressures ease from cheaper shipping and factory costs, Next will cut prices on its clothes next year.
However, Lord Wolfson said that the easing of inflation was just that and prices would “never go back to where they were”.
Next posted a 5.4 per cent rise in sales to £2.6billion in the first half of this year while pre-tax profits rose 4.8 per cent to £420million.
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It now expects to make £875million of profits in the full year, compared to its earlier guidance of £845 million.
Next has grown its business in recent years.
And Lord Wolfson acknowledged the greatest risk to the business was becoming a “corporate blob”.
He said that while when big companies are booming they might appear invincible, they are still vulnerable to smaller rivals.
And he warned these start off as innovative minnows before “becoming a shoal of piranha” which feast on “the carcass of the once mighty behemoth”.
He told investors “Don’t panic – we are not going to go on an investment binge”.
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Shoplift no-show cops dig
POLICE are failing to respond to 71 per cent of shoplifting cases and only turning up 20 per cent of the time when staff have caught and detained thieves, Co-op bosses said.
Shirine Khoury-Haq, its chief executive, revealed that the retailer had sent a Freedom of Information request to forces after realising the lack of response from officers was extremely high.
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She said: “Criminal gangs are operating in some cities seemingly free of consequences. Without an improved police response the fabric and confidence of our communities will continue to be undermined.”
Matt Hood, Co-op’s food boss, said that in the majority of cases, store staff were having to let thieves go because no police turn up.
He added: “It makes me very angry that some people think this is a victimless crime – that is not what my colleagues face when they have knives and syringes pulled on them.”
The Co-op said it was investing in cameras and increased security to protect its staff as criminals were looting personal care items, baby food and coffee – rather than the occasional theft of high-value items such as alcohol or steak.
Co-op’s comments on the wave of shoplifting came as it reported a narrowing of losses from £59million to £9million in the past six months.
Ms Khoury-Haq said the member-owned business had prioritised investing £29million into boosting staff pay awards and £90 million into lowering grocery prices rather than making a profit this year.
400 new roles
A FINNISH toilet roll firm has revealed plans to build the UK’s biggest tissue paper mill in East Yorkshire.
Metsä Tissue said it would create 400 local jobs in Goole, after making a “landmark investment”.
PM Rishi Sunak said the news was “another example of the UK being the first choice for European investment and delivers on my commitment to grow the economy.”
The plant is set to boost the UK’s self-sufficiency as up to 45 per cent of tissue products are currently imported.
JD’s still ‘king’
JD SPORTS has reasserted its status as the “King of Trainers” after profits jumped by more than a quarter.
The retailer toasted profits of £375million as group sales rose by 8.3 per cent to £4.7billion in the six months to the end of July.
Boss Regis Schultz said JD’s customers had been more resilient amid the cost of living crisis.
He said they “are younger, benefitted from salary increases and are not impacted by mortgage increases because they live with their mum and dad”.
