A couple of swallows do not make a summer.
That is the very heavy caveat which must be applied when asking whether, because Next and B&M fared better than expected over Christmas, the retail sector as a whole has done.
A further caveat to be applied is that Lord Wolfson, the chief executive of Next, is a past master at managing market expectations.
The longest-serving chief executive of a FTSE-100 company, he has downplayed his hopes for festive trading during many past Novembers, only to surprise on the upside come January.
Some encouraging signs
That said, the numbers are hugely encouraging, particularly in view of the silence that has been heard elsewhere around the high street.
For more than a decade, retailers have been under increased pressure from the listing authorities to publish any unexpected news around Christmas trading, lest a false market be created.
Accordingly, were there to be bad news out there, one would have expected one or two unscheduled trading statements by now.
The London Stock Exchange is now into its third day of trading in 2023 and, as yet, there have been no profit warnings.
Overdoing the pessimism?
That plays into the idea that a lot of media and City commentators were overdoing the pessimism going into Christmas.
As Simon French, the chief economist and head of research at the investment bank Panmure Gordon, noted this morning: “First few UK festive trading updates (Next, B&M, Greggs) painting a picture that doesn’t fit narrative of doom and gloom. In our 2023 outlook we noted regressive nature of staples inflation would generate some incredibly difficult hardships – but may not be reflected at macro level.
“Very early days – and entirely possible a new year hangover kicks in – but strong aggregate household balance sheets, behavioural adaptations and high [job] vacancy rates have been drowned out amidst…
