LONDON (Reuters) – Britons spent Christmas more than expected, according to NXT.L, one of Britain’s biggest clothing retailers. That threatened to affect festive sales.
But Next said an economic slowdown was looming this year and warned that British shoppers were cutting back on their spending.
But for Christmas they opened their purses. Next sales exceeded expectations, up almost 5% compared to last year. Discounter B&M (BMEB.L) and snack chain Greggs (GRG.L) also posted higher sales, demonstrating the importance of value in tough times.
Next’s performance boosted UK retail stocks on Thursday on hopes that Christmas demand, key to most UK retail earnings, will perform better than expected across the board.
Next was Primark’s AB Foods (ABF.L), up 3%, and clothing and grocery chain Marks & Spencer (MKS.L), up 5%. JD Sports (JD.L), online retailer ASOS (ASOS.L) and electronics retailer Currys (CURY.L) all rose about 3%.
Shops at the value end of the scale were even better than Next.
B&M, which sells everything from toys to frozen food to garden furniture, posted a 6% increase in equivalent Christmas sales, while Greggs, whose snacks and coffee are cheaper than many competing cafes, recorded sales during the period. said to have increased by 18%.
But the resilience won’t last this year, Next said.
Sales are expected to decline by 2% in 2023. This is because shoppers are beginning to react to rising mortgage costs, more people are exiting fixed-price deals, and they are beginning to realize the impact of rising energy prices on household budgets.
“Retailers expect real pain in 2023,” said Mark Crouch, an analyst at social investment network eToro.
Tight spending could continue to boost chains such as B&M.
“As shoppers flock to discount stores and the cost of living is significantly squeezed, the appetite for bargains has skyrocketed,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdowne. there is
Reported by Sarah Young, James Davey, and Paul Sandle; written by Sarah Young. Editing by Emelia Sithole-Matarise
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