Online sales help boost Next's performance

Friday, August 5, 2011 - 11:37 by Sarah Collinson

Retailer Next has revealed that although sales at its high street outlets have dropped by 1.7 per cent in 2011, it is able to grow its business thanks to safe shopping online.

Consumers may be migrating to e-commerce and away from the high street, which explains why the firm saw a 15 per cent increase in sales from its Next Directory online service.

The buoyancy of e-commerce allowed Next to record an overall sales increase of 3.2 per cent in the first half of the year. However, the slide in high street sales could be a problematic indicator of future problems for the company.

The main reason that consumers are choosing safe shopping online over their local town centre at the moment seems to be price, according to a number of studies which concur on this topic.

To help ensure that consumers continue to visit both its e-commerce site and bricks and mortar locations, Next has promised that it will not increase its prices at all in 2012. This might be seen as something of a gamble but in reality if it can win it higher sales it will come out on top in a flagging market.

Next head, Lord Wolfson, explained that while e-commerce and catalogue sales were definitely on the rise, it would be difficult to conceive of a time at which the company did not make a majority of its sales via the high street.

Next had originally forecast a small 1.5 per cent sales increase during the first six months of 2012, but the unprecedented rise in e-commerce activity was the main contributing factor to it more than doubling this predicted rate of growth. Other chains which want to survive will have to follow its lead in the coming months.