Fashion chain Next and supermarket Morrisons have shown signs of overcoming the economic gloom as demand for summer clothes soared in warm weather and households looked to cut weekly shopping bills.
The good news from the pair in unscheduled updates comes despite the sharpest economic decline in more than 50 years during the first three months of 2009.
Both have raised profit forecasts for the year.
Next has been helped by much better weather than the same time last year, leading to far shallower sales falls than originally forecast.
Meanwhile Morrisons – the UK’s fourth biggest supermarket – said more shoppers were attracted by its “keen positioning” on price, fresh produce, promotions and service standards in a fiercely competitive market. Morrisons’ shares were seven per cent ahead as it said the growth combined with supply chain improvements and other cost savings meant full-year results would surpass earlier hopes.
And Next – which has already raised its forecasts once in May – has now added £30 million to its profits outlook for the year as a whole.
The group warned the favourable impact of the weather was unlikely to last into the second half, which is still expected to be tough as shoppers choose to save more and clear debts.
But it does not foresee a collapse in consumer sentiment despite rising unemployment, although the spread of swine flu could deter shoppers and impact trading for the rest of the year.
The healthy update from Morrisons supports recent industry figures showing that it increased its share of the market from 11.3 per cent to 11.6 per cent in June.
Next’s shares edged lower but the stock has more than doubled since the lows of last October.
Last week babycare chain Mothercare reported a strong rise in sales during the 15 weeks to July 10 as the retailer enjoyed further positive trading at its Early Learning Centre (ELC) business.