Next chief attacks 'Luddite councils holding back growth'
The chief executive of Leicestershire retail giant Next has criticised some councils for holding back economic growth through "an unhealthy mix of Luddite intransigence and incompetence".
Simon Wolfson said while most local councils were enthusiastic and efficient, some planning departments appeared to be anti-jobs and anti-growth.
He spoke out to highlight difficulties in planning regulations as the Enderby-based chain, which has 540 stores, posted its annual trading figures yesterday.
The company's pre-tax profits for the year to January were up 9 per cent to £621.6 million, on total sales of £3.5 billion – an increase of 3 per cent.
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Online and catalogue sales have increased by 9.5 per cent, but there was no growth for the company's existing high street and out-of-town stores.
Lord Wolfson said the solid performance – as shoppers continued to feel the pinch of a faltering economy, wage freezes and uncertainty about the future – was down to building the Next brand, cutting costs and investing online.
The Tory peer said the business had opened 250,000 sq ft of new shop space in the year – a trend that was likely to continue – but that some planning departments had made it difficult for the company to grow.
He said: "There are some brilliant councils who work with retailers and house-builders to get growth going, but there are some terrible councils whose initial response to a planning application is 'no'. Fighting that is very hard.
"It's got nothing to do with a council's politics – one Tory council took nine months for planning permission for a stock room."
Lord Wolfson said improved online sales had been helped by moving the next day delivery deadline forward to 10pm, and introducing next-day in-store deliveries.
He said while overseas Next stores were not making money, overseas franchises were and online sales to countries such as Germany, Australia, America and Russia were £54 million – of which £10 million was profit.
That overseas online sale figure is expected to rise to £75 million.
He said rising costs in areas such as wages, improving the Next Directory and rent and rates had been made up for through savings in areas such as store deliveries, lower freight costs, better margins and staff savings.
The stock markets reacted by briefly pushing Next shares to an all-time high of 4299p yesterday – double its value of two years ago.
Company chairman John Barton said online and in-store sales complemented one another.
He said: "As ever, our success is built on the stability and effectiveness of our management across the group. They performed well in challenging economic conditions.
"We anticipate another challenging year, with little if any growth in the UK retail economy. In these circumstances we again aim to achieve growth by investing in the brand, improving products, controlling costs and returning cash to our shareholders."
Within hours of the figures being released, the company announced a 13 per cent bonus for its head office staff.
Last week, the John Lewis Partnership gave its staff bonuses of 17 per cent, after sales grew 9.3 per cent and pre-tax profits rose 15 per cent.