Next puts on a strong online sale showing amid market chaos

The group is forecast by analysts at Seymour Pierce stockbrokers to have grown revenues by 4.1 per cent at its 520 UK and Ireland stores in the three months to December 24, compared with a 3.3 per cent drop in the previous quarter. This will equate to a 1.8 per cent decline in like-for-like sales on a year earlier.

While figures will be flattered by weak sales a year ago, when heavy snowfall hurt retailers, 9.3 per cent growth is also forecast at Next Directory, its catalogue and online business.

Later in the month, luxury goods giant Burberry, fashion firm SuperGroup and the supermarkets are expected to boast stronger performances through the crucial festive season, while Argos owner Home Retail Group, entertainment group HMV and Mothercare are forecast to have struggled.

Next’s update will come amid gloom for the retail sector, which has seen a series of profits warnings from the likes of Thorntons and HMV in recent weeks as well as companies such as D2 Jeans and Barratts falling into administration.

Kate Calvert, an analyst at Seymour Pierce, said: “We believe that Next will grow market share and the performance of Directory over the period is expected to show the strength and flexibility of its multi-channel business model.”

The Directory business has offset a weaker performance in the group’s stores in recent months, as cash-strapped consumers, hit by higher prices and weak wage growth, turn to the internet in search of cheaper deals.

Next, which has more than 30 Yorkshire stores, has passed on price rises to customers to maintain profit margins, in the face of higher commodity prices and increased VAT.

The group recently said it was confident there will be no further increase in selling prices in the first half of 2012.

It is expected to report pre-tax profits of £568m for the year to January, compared with £551m a year earlier, a three per cent increase.