Next, B&M and Greggs see Christmas sales boost despite rising prices

Big brands including Next, B&M and Greggs have reported a sales boost over Christmas despite rising prices, rail strikes and severe weather.

High Street giant Next said that sales rose by 4.8% in the nine weeks to 30 December after a "dramatic boost" from the cold snap last month.

Greggs and discount chain B&M also performed better than expected.

Some analysts suggested that customers were opting for cheaper options as prices continue to soar.

Boots, which is owned by US firm Walgreens, said it had seen a "very strong" Christmas too, with demand up for for its cheaper "Everyday" range of products.

But Next still warned that higher energy bills and mortgage rates would dampen demand from shoppers in the year to come.

While it faces its own rising costs and supply chain issues, Next confirmed that it will increase prices for its spring and summer clothes and home goods by 8%.

Shoppers will also see prices rise in the autumn and winter, the retailer said, but the increase will not be as sharp.

While Next reported strong sales for the Christmas period, it gave a "cautious" outlook for the year ahead.

Value-for-money

Elsewhere on Thursday, there was more evidence that customers sought out cheaper treats on the High Street over the holidays.

Boots reported that retail sales jumped by about 15% in December when compared with one year ago with demand for its basics range up by a third.

Greggs said sales surged by nearly a quarter over 2022 as it added about 150 shops to its empire.

The bakery chain said that it had seen huge demand for its mince pies and festive drinks, as well as more customers looking to take advantage of offers on its app in a bid to save money.

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Discount retailer B&M said that comparable sales rose across its shops by 6.4%, suggesting that more customers are prioritising value as prices continue to rise at their fastest rate for almost 40 years.

Russ Mould, investment director at AJ Bell, said that High Street staples Greggs, B&M and Next are "united by having a presence on retail parks where business has been better than expected in general".

He pointed out that widespread train strikes in December will have prevented a lot of people from travelling to city centre shops.

With about 500 stores across the UK, the Next group said sales across its brick-and-mortar shops were strong across the festive trading period.

Next said sales across its brick-and-mortar shops were strong across the key festive trading period.

It said that it might have previously underestimated how much the pandemic had put customers off travelling to its High Street locations.

New figures from research firm Springboard also suggest that shoppers provided retail and hospitality firms with a much-needed boost ahead of Christmas.

Shopper footfall in December was up 5.8% on the month before and 9.9% higher than a year before, it said.

Next is one of the first major retailers to report on Christmas trade, and some experts have described the performance as "a pleasant surprise".

Mark Crouch, analyst at social investing network eToro, said: "At a time when real incomes are coming under pressure, Next has managed to beat expectations."

But he pointed out Next now anticipates a drop in both sales and profits for the coming year. "The retailer expects the real pain to come in 2023," he said.

Next reckons profits will fall by as much as 7.6% to £795m in the year to January.

Mr Crouch said: "Next is often seen as a bellwether of the High Street... you can guarantee many retailers will be in much worse positions."

During the last year it added several brands to its portfolio of shops, including Joules and furniture retailer Made.com, which it bought out of administration in November.

It already owned the likes of Lipsy, as well as taking over online operations for Gap in the UK and ensuring it kept up a High Street presence as the brand struggled.

With all the disruption this Christmas, it is retailers like Next with a well-run multi-channel operation - including online, store shopping and click and collect - who are likely to have navigated all the challenges of this festive period the best.

Next also has a lot of modern out-of-town stores which has seen the biggest footfall as shoppers returned to the shops in search of the best deals. It's often described as a bellwether for the high street but it's one of retail's strongest performers.

Next is warning about tougher times ahead, with a drop in sales and profits for the next financial year. But this retailer, at least, is well placed to handle the likely recession.