Britons spent greater than anticipated over Christmas, Next, one of many nation’s largest clothes retailers stated, in an indication that resilient buyers helped the High Street dodge a cost-of-living disaster that threatened to hit festive gross sales.
But a slowdown looms this 12 months, stated Next, which warned that British buyers have been set to chop again on spending.
In the run-up to Christmas, nevertheless, they opened their wallets. Next’s gross sales grew by nearly 5% in comparison with final 12 months, beating expectations. Discounter B&M and snack chain Greggs additionally reported greater gross sales, displaying the significance of worth in straitened instances.
Next’s efficiency lifted British retail shares on Thursday on hopes that Christmas demand, key to most British retail income, will probably be higher than anticipated throughout the board.
Next was up 8%, whereas Primark-owner AB Foods rose 3%, garments and grocery chain Marks & Spencer traded up 5%. JD Sports, on-line retailer ASOS and electrical retailer Currys have been all up about 3%.
Shops on the worth finish of the size did even higher than Next.
B&M, which sells every thing from toys to frozen items and backyard furnishings, posted a 6% rise in comparable Christmas gross sales, and Greggs, whose snacks and coffees are cheaper than many rival cafes, stated its gross sales have been up 18% within the interval.
However, the resilience wouldn’t final into this 12 months, stated Next.
It expects gross sales to fall by 2% in 2023, as buyers begin to react to rising mortgage prices, with extra individuals coming to the top of fixed-price offers, and as they begin to realise the influence of upper power costs on family budgets.
“The retailer expects the real pain to come in 2023,” stated Mark Crouch, analyst at social investing community eToro.
The spending squeeze is prone to proceed to spice up chains like B&M.
“The appetite for bargain hunting has increased sharply amid the big cost-of-living squeeze with shoppers flooding into discount stores,” stated Susannah Streeter, senior funding and markets analyst at Hargreaves Lansdown.
