Next states that sales growth has slowed in the last five weeks, as the effect of pent-up demand begins to diminish.

Full-price sales in the 13 weeks to 30th October were up +17% Yo2Y, yet full-price sales in the last five weeks were up a more modest +14% (still better than Next's recent forecast of +10%).

The retailer does not expect sales to continue at the level seen in Q3, and is maintaining its guidance for full-price sales to be up +10% in Q4, as the effects of pent‐up demand continue to diminish, and, although consumer finances are in good shape, price increases in essential goods (such as fuel) may moderate demand for more discretionary purchases, such as furniture.

Next says that stock availability has improved but remains challenging, with delays in the international supply chain being compounded by labour shortages in the UK transport and warehousing networks. However, it adds, to date, stock limitations appear to be offset by strong underlying demand.

During the last five weeks, Next has beaten its full-price sales forecast by £14m, which generated around £4m of profit. The retailer anticipates that this will be largely offset by further investment in digital marketing and increased use of inbound air freight and other online distribution costs, so it is maintaining its full-year profit guidance of £800m.