Next chief executive Simon Wolfson said that people who aren’t traveling are spending more on clothes, helping the retailer's shares climb 6%.
The retailer raised its outlook as people are returning to its stores in greater numbers than initially expected.
Mr Wolfson said although sales of swimwear are still down significantly as shoppers eschew summer beach holidays, general clothing sales are increasingly picking up to last year’s levels.
“If people are not overseas, then they are here in the UK buying clothing,” he said in an interview.
“There are all sorts of things going on, but we think people not going overseas is supporting sales.”
German sports-clothes maker Puma also said sales this month are near the level of last year.
The bulk of Next’s stores are in the UK, where many consumers are staying at home during holidays rather than traveling abroad. This week, the country said people returning from Spain need to self-quarantine due to the uptick in Covid-19 cases there.
Next shares surged as much as 10% before easing back after the company said it expects to report pretax profit of about £195m (€214m) for the year. The midpoint of the company’s previous forecast was for zero earnings.
Puma also gave evidence that consumers are dedicating more of their disposable income to clothing as they cancel trips. International travel will take time to return to pre-pandemic levels, chief executive Bjorn Gulden said. That should help a recovery this year, and the company forecasts growth to resume in 2021.
“Our sector will benefit from that,” Mr Gulden said. “Right now we see it clearly.” Tourists often take advantage of lower garment prices abroad, particularly in markets such as Spain, the home of Zara owner Inditex.
Next buoyed sentiment as its update shows consumers are starting to buy fashion again following months of decline. The retailer, which temporarily closed its e-commerce business at one point, said its warehouse capacity has since recovered and second-quarter online sales rose 9% like-for-like. Bloomberg