Retailers say bad weather hit Christmas sales

TWO of the country's biggest retailers reported a drop in sales in the run-up to Christmas, adding to signs that bad weather compounded a tough environment for consumers during the biggest spending period of the year.

Next, the No.2 fashion chain behind Marks & Spencer, said today sales at shops open at least a year fell 6.1 per cent from August 1 to December 24.

Music, books, DVDs and games retailer HMV Group said full-year profit would be around the lower end of forecasts and that meeting a test of its lending rules in April would be tight.

The updates, the first by major retailers following the key Christmas trading period, will add to fears that severe winter weather deterred shoppers already worried about rising taxes and public spending cuts.

Next, which runs over 500 stores in Britain and Ireland, estimated it lost 22m of full-price sales as a result of the snow, equivalent to about 2.2 per cent of total sales.

However, sales at its Directory home shopping business rose 8.7 per cent and the group said it expected a full-year profit of 540m-555m, within its previous forecast range.

HMV, which has long been struggling with cut-price competition from supermarkets and the internet, said sales at British and Irish stores open at least a year dropped 13.6 per cent in the five weeks to January 1.

The group, originally scheduled to publish its Christmas figures next week, said it planned to exit around 60 British stores over the next year and take other steps to make sure it passes a test of its lending rules in April.

Games Workshop Group, a model soldier retailer, said full-year profit would miss forecasts because of weaker than expected sales.