yesterday reported a 15 per cent rise in first half pre-tax profit and pinned its hopes on internet sales to fuel expansion.
The retailer said the tough consumer climate, weakened by a looming VAT hike and job cuts in public services would mean at least three to five years of low sales growth.
Next sales rose five per cent in the period with homeware performing strongly. Pre-tax profit was £213.3m and the company repeated its annual profit forecast of around £530m.
The company’s share price jumped 7.8 per cent to close at 2,176p following the announcement, which also included a warning that clothes prices would rise up to eight per cent because of spiralling cotton costs.
Chief executive Lord Simon Wolfson said a consumer boom had been “supercharged” by easy credit which was no longer available However, he claimed Next was in a good position to ride out the storm because of its strong cash position.
“The economy is neither falling off a cliff nor recovering quickly, the truth is somewhere in between,” he said. He added that this environment meant like-for-like sales improvement would be “difficult”.
Referring to the internet he said: “We will have to adapt to a new type of consumer environment, one in which like-for-like sales growth is likely to be low for some time and top-line growth will need to come from other opportunities.”
Among the changes online will be a guarantee that most customers will receive their goods the next day if they order as late as 9pm.
Wolfson said international sales on the web had grown 250 per cent with sales in Eastern Europe proving particularly strong.