Fashion retailer Next today said trading conditions in 2011 were likely to get worse before they get better, as it posted an expected 9 per cent rise in annual profit.
"Retailing will feel like walking up the down escalator - we will have to work hard to stand still," chief executive Simon Wolfson said.
The group, which runs over 500 stores in Britain and Ireland as well as the Directory home shopping business, said its average prices were up about 6 per cent so far this year but it expected rises of between 8 per cent and 10 per cent in the second half.
It estimated total first-half sales in the range of down 0.5 per cent to up 2.5 percent.
It said if total sales for the 2011-12 year fell within this range then pretax profit would be between £520 million and £570 million - in line with current market expectations.
A raft of retailers have said trading conditions have got harder since Christmas as shoppers have had to deal with tax rises, inflation, uncertain employment prospects and government spending cuts. Retailers are also facing significantly higher input costs.
Next recorded a pre-tax profit of £551 million during the 12 months to the end of January. That was in line with company guidance of £540-555 million and up from £505 million in 2009/10. Group revenues increased 1 per cent to £3.45 billion.
Next is paying a total dividend of 78 pence, up 18 per cent.
Shares in Next, which have lost 9 per cent of their value over the last six months, closed on Wednesday at 1,965 pence, valuing the business at £3.53 billion.
Reuters
