Clothing and interiors chain Next concentrated on maintaining margin in the run up to Christmas but saw 'disappointing' store sales.

In the first Christmas trading update from a major retailer, the chain says overall sales were 3.1% higher between 1 August and 24 December, during which time it didn't discount. However store sales dropped by 2.7% while online sales jumped by 16.9%.

'The strong performance of Next Directory continued to compensate for slightly disappointing retail store sales. Despite a good final week before Christmas, November and December sales were disappointing given that snow adversely impacted sales in 2010. A number of factors have subdued sales in the final quarter and it is hard to judge to what extent warm winter weather and higher levels of competitor discounting masked the deeper, longer lasting, economic effects.'

The chain says it expect full-year profits of about £565m, up 4%, with no price rises in 2012 and to return £200m to shareholders through share buybacks.

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