Next chief fears stagnating spending will be the “new normal”
Lord Wolfson, chief executive of Next, has issued a stark warning over the future prospects of the UK retail industry.
Speaking as he unveiled a 15% up tick in first half pre-tax profits at his clothing chain The Times quoted Wolfson as saying that although he did not anticipate “Armageddon” or a double dip recession, retail spending would all but come to a standstill.
Describing this “different type of retail environment” as "the new normal" Wolfson pointed out that Next could continue to deliver returns for shareholders despite low growth and would pursue a strategy of expanding existing outlets and diversifying into homeware branches.
Citing tight lending and austerity measures as factors dampening demand the Next head also foresees the era of real terms deflation in clothing coming to an end next year as higher cotton and freight costs feed through.