'I have been banging on about investment in roads and other infrastructure for a long time,' said Lord Wolfson, who advises the Tories on economic policy
Lord Wolfson, the Tory peer who runs high street giant Next, has thrown his weight behind the critical report penned by former deputy prime minister Lord Heseltine which urges the government to tackle thorny issues such as airport expansion and road building to get the economy moving.
"I have been banging on about investment in roads and other infrastructure for a long time," said Wolfson, who advises the Tories on economic policy. "It's the same as getting consumers to buy more clothes or homes or technology and when it comes to infrastructure there is definitely more demand than supply."
His comments came as Next cheered investors with the promise of annual profits of between £590m and £620m after sales picked up during the closing weeks of its third quarter. Two months ago the UK's second largest clothing retailer worried investors when it said trading during the closing weeks of the summer had been "unusually quiet" and the subsequent improvement added to optimism the retail sector is bouncing back from a weak summer.
Once the Olympics finished and the weather changed "things suddenly got back to normal", said Wolfson, although he cautioned the pattern of consumer spending remained volatile and predicted a slow recovery: "It very hard to read but our best guess is not much has changed or will change in the run up to Christmas in terms of consumer confidence. I don't think we'll see a light bulb moment."
The Heseltine study calls on the government to align the country's "huge infrastructure demands" with the interests of "hungry institutional funds" and to "clarify urgently" its position on airport capacity in the south east so investors know where they stand. "It is not acceptable for big decisions to be sidelined for three years because it is politically expedient," said Wolfson, referring to the runway debate. "It is very strange to think about something for the same amount of time as it would take to build it."
Total Next sales rose by a better-than-expected 2.7% in the 13 weeks to 27 October, with its shops 1.1% ahead. However, growth at its home shopping arm Directory slowed sharply with sales up 5.6%, compared with 13.3% in the first half. Wolfson said the Directory business had faced tough sales comparisons with a year ago when moving the cut-off time for next day deliveries from 7pm to 9pm delivered a substantial boost. Its growth had slowed to a "more sustainable level", he said.
Analysts said it was a "quarter of two halves", with sales down in August as many people stayed at home to watch the London Olympics. But improving confidence and colder weather, prompting shoppers to buy knitwear and warmer jackets, led to sales bouncing back in the autumn.
"Bears will point to the slowdown in Directory sales and bulls to the impressive pickup in retail sales," said Panmure Gordon analyst Jean Roche. "We are big fans of this blue blood multichannel retailer." The shares closed down 1% at £35.66.