Retailers say snow hit Christmas sales

Two of the country's biggest listed retailers reported a drop in sales in the run-up to Christmas as snow and sub-zero temperatures deterred shoppers already worried about rising taxes, public spending cuts and inflation.
Next, Britain's No.2 fashion chain behind Marks & Spencer, said on Wednesday sales at shops open at least a year fell 6.1 percent in the 21 weeks to December 24.
Music, books, DVDs and games retailer HMV warned full-year profit would be around the lower end of forecasts and meeting a test of its lending rules in April would be tight. Its shares lost a quarter of their value.
A strong Christmas performance from department store operator John Lewis indicated a divergence between Britain's premium and mass market retailers.
The updates, the first by major European retailers after Christmas, will add to fears that bad weather kept many shoppers at home over the biggest spending period of the year.
Sector leaders Carrefour in France, Tesco in Britain, and Metro in Germany will publish figures next week.
SNOW IMPACT
Next, which runs over 500 stores in Britain and Ireland, estimated it lost 22 million pounds of full-price sales as a result of snow that gripped northern Europe throughout much of December.
Sales were also hit by a shortage of best-selling lines, particularly jeans, where Next was let down by a supplier.
However, sales at Next's Directory home shopping business rose 8.7 percent and with the company's post-Christmas sale starting well it forecast a profit of 540-555 million pounds for the year to end-January , within its previous guidance.
Next chief executive Simon Wolfson told Reuters he expected price rises to be a bigger factor in dampening consumer demand in 2011 than government cuts and tax rises.
He expected Next's prices would rise about 8 percent in the first half of 2011 as a result of higher input costs, particularly cotton, and the rise in VAT sales tax.
Next shares, which had fallen 11 percent over the past three months, were up 1.5 percent at 2,050 pence by 10:55 a.m..
"The shares look good, if unexciting, value, but we suspect that Next will continue to do slightly better than management's guidance," said Altium Securities analyst Philip Dorgan. (from reuters)