Two of Britain's biggest listed retailers reported a drop in sales in the run-up to Christmas as snow and sub-zero temperatures deterred shoppers already worried about rising taxes, public spending cuts and inflation. Next, Britain's No 2 fashion chain behind Marks & Spencer, said on Wednesday sales at shops open at least a year fell 6.1 percent in the 21 weeks to December 24.
Music, books, DVDs and games retailer HMV warned full-year profit would be around the lower end of forecasts and meeting a test of its lending rules in April would be tight. Its shares lost a quarter of their value. A strong Christmas performance from department store operator John Lewis indicated a divergence between Britain's premium and mass market retailers.
The updates, the first by major European retailers after Christmas, will add to fears that bad weather kept many shoppers at home over the biggest spending period of the year. Sector leaders Carrefour in France, Tesco in Britain, and Metro in Germany will publish figures next week. Next, which runs over 500 stores in Britain and Ireland, estimated it lost 22 million pounds ($34 million) of full-price sales as a result of snow that gripped northern Europe throughout much of December.
Sales were also hit by a shortage of best-selling lines, particularly jeans, where Next was let down by a supplier. However, sales at Next's Directory home shopping business rose 8.7 percent and with the company's post-Christmas sale starting well it forecast a profit of 540-555 million pounds for the year to end-January , within its previous guidance.