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Next reports strong Christmas trading

Next plc has announced a Q4 trading statement and issued guidance for the year ahead:

Full price sales were up 5.7% in the 9 weeks to 30 December, ahead of previous guidance of a +2% rise

Next has increased its guidance for Profit before tax for the year by £20 million to £905 million, up 4.0%

Next has issued full year guidance for the FY25 financial year. It expects total sales to rise by 6% and profit before tax to be up 5%

Charlie Huggins, manager of the ‘Quality Shares Portfolio’ at Wealth Club, who owns shares in Next, commented: "Next has pulled yet another rabbit out of the hat, leading to a further upgrade to its full year sales and profit guidance. It has demonstrated once again why it's considered one of the best run retailers around.

"UK consumer spending appears to have defied gravity. A strong employment market and rising wages have helped cushion inflationary cost pressures, meaning consumers have continued to fill their Christmas stockings with Next's wares, despite the gloomy economic headlines. 

"Next's online sales were particularly strong reflecting better stock availability and excellent operational execution. This stands in stark contrast to other retailers like Superdry which have struggled in the prevailing economic environment. 

"The future for Next looks bright and is reflected in the group's guidance to grow sales and profits again in the year ahead. 

"Next's core proposition is clearly resonating with the UK consumer and is being augmented by intelligent acquisitions of brands like Fat Face. With inflation falling and wages rising, the economic picture also looks a lot less bleak than at the start of last year."  

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Post-Christmas returns fall slightly, but £1.4bn worth of items are still winging back to retailers

‘Takeback Tuesday’ returns decreased by around 6% yesterday compared to last year, says ParcelHero. Despite the fall, around £1.41bn worth of items are now heading back to retailers, which could prove the final straw for some hard-pressed retailers.

Post-Christmas returns for the first working day of the year were down by around 6% on the same day last year, says ParcelHero. Despite this dip, it says around £1.41bn worth of items are now winging their way back to retailers. The home delivery expert cautions that the fall in returns is likely due to lower Christmas spending rather than a change in customer habits.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘We’ve looked at our own returns volumes and spoken to people in the courier and retail industries and it looks like there was a small but distinct drop in the volume and value of returns on “Takeback Tuesday” yesterday, compared to record returns last year.

‘Last year, around £1.5bn of unwanted gifts and goods were returned in the first week after the Christmas and New Year break. This year, we’ve seen a slight dip in returns volumes and, looking at the types of items being returned, we’re estimating around £1.41bn of clothing, electrical goods and toys are now winging their way back to retailers. The number of courier bookings for returned items peaked at 10am yesterday as people returned to the post-Christmas daily grind. The Royal Mail says Takeback Tuesday returns were up around 52% on a typical day last month and that certainly chimes with our own figures.  

‘We’d love to say the slight drop in the number of Takeback Tuesday returns is because shoppers are becoming more aware of the environmental impact of returns and the financial strains they place on many much-loved, smaller, specialist retailers.

"But it’s more likely the slight fall reflects what we suspect was a relatively lacklustre Christmas period for retailers, with online and in-store sales looking relatively flat. Fewer gifts equals fewer returns. Barclays says card transaction volumes on Black Friday 2023 were down -0.6% compared with 2022 and The Guardian reports that pre-Christmas “super weekend” sales fell by up to -32% online and -4.5% overall."

He added: "Our recent industry report shows that returns are costing UK sellers around £60bn a year. The study reveals a large chunk of these returns happen in the post-Christmas period. Around 47% of all ParcelHero shipments were marked as “returns” in the first week of last year.

"Online businesses face a no-win choice between reluctantly swallowing returns costs or risking negative online reviews from those customers with returns issues. 81% of stores say they are very concerned by increasing levels of customer returns. Smaller, specialist online retailers who thought they had enjoyed healthy Christmas sales are now facing plunging margins and warehouses filling with unsaleable stock as January returns come rolling back in.

"Customer expectations and the financial realities for smaller e-commerce sites are increasingly at odds. Some online retailers have told us that they deal with return rates as high as 60% after Christmas, with most being accepted unconditionally in order to maintain their all-important five-star ratings. These returns are being accepted despite the fact that online orders cost retailers £3 more to process than physical sales.

For more information on the full impact of returns on retailers large and small, don’t miss ParcelHero’s report,“ Retailers Reach the Point of No Returns” at https://www.parcelhero.com/content/downloads/pdfs/returns/returnwhitepaper.pdf

(Image courtesy of Mohammed Salem from Pixabay)

 

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Happy New Year from That's Christmas and That's Food and Drink

The husband and wife team who responsible for running That's Christmas and That's Food and Drink (that's us!) would like to wish everyone a happy and joyous New Year.

We would like to thank our friends in the public relations industry and food and drink companies and gift companies and other designers and creators of fine gifts from diaries and calendars, to jewelry to toasters and air fryers and from games to electronic equipment and food and drink makers and providers for their fantastic help in writing the posts on our sites.

And we would like to take this opportunity to thank you, our readers no matter where you are.

That's Christmas will continue publishing news and features throughout the coming year when these are relevant but it will largely be resting until the next pre-Christmas season starts up again.

However, That's Food and Drink will be continuing to publish news and features about the food and drink industry over the coming year.

We will also take a look at tweaking our blog designs to make them more user friendly.

If you would like to be featured on any of our sites please email afj_uk@yahoo.com.

(Image courtesy of Tham Nguyen from Pixabay)