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Retail giant Next has revealed the impact of the Covid-19 lockdown on trading has been “faster and steeper” than anticipated as it reports a 41% plunge in full-price sales in its first quarter results.
In the period from 26 January to 25 April, Next reported a 52% fall in high street sales as well as a 32% decrease in online sales.
The retailer said it now believes its full-year results could decrease by at least 40%, predicting that the Covid-19 pandemic will result in lower sales in every quarter, even after the lockdown restrictions are lifted.
Next expects its sales to fall by 62% in its second quarter and could see a 28% fall over the fourth quarter to January 2021, in the worst case scenario.
The retailer also said it has plans to reopen its stores post lockdown, but will be prioritising out-of-town outlets initially, where it would be easier to operate in a “socially distanced world.”
Next said it anticipates that it will take some time for “customers to return to their normal shopping habits” and sales will be “very subdued” when trade commences.
The group said: “The fall-off in sales to date has been faster and steeper than anticipated in our March stress test and we are now modelling lower sales for both the first and second half of the year.
“We believe that the effects of the coronavirus will be felt for longer than we first anticipated. The economic consequences and continued social distancing will mean that both retail sales and online sales will be disrupted even after full lockdown measures have been lifted.”
Earlier this month, Next had announced it had reopened its website after a two-week shut down amid the coronavirus pandemic.
The company made the decision to temporarily cease online orders on 26 March after concerns about the health and safety of its warehouse employees were raised.
