Mixed views of Brexit retail impact

The chief executive of fashion giant Next has said the worst of the Brexit-fuelled price hikes on the high street are over as the group upped its earnings outlook after an “encouraging” trading period.

Chief executive Lord Wolfson, a prominent Brexit supporter, said 2018 will see an end to price rises, with the group predicting stable prices from next autumn.

He was speaking as the fashion group hiked its sales and profit guidance as it said trading had turned a corner after a difficult start to its half year, although pre-tax profits still fell 9.5% to £309.4 million for the six months to the end of July.

Shares in the group surged by 13% on the upbeat outlook, with improved trading in the second quarter suggesting efforts to overhaul its directory arm and clothing ranges are paying off.

But the group’s more cheery outlook is at odds with retail rival John Lewis, which warned over falling consumer demand and cost increases linked to the Brexit-hit pound as it also reported half-year results yesterday.

The group saw pre-tax profits for the six months to the end of July plummet 53.3% to £26.6m.

John Lewis chairman Sir Charlie Mayfield cautioned the group expects “the headwinds that have dampened consumer demand and put pressure on margins to continue into next year”.

Meanwhile, supermarket group Morrisons reported a 39.9% increase to £200m in pretax profits for the half year to July 30.

Turnover in the period grew 4.8% to £8.42 billion .

Group chief executive David Potts, who is overseeing a turnaround of the business, said: “A new Morrisons is beginning to take shape.”