Next's splendid Christmas performance can't last all year

This is what Simon Wolfson, chief executive of Next, said this time last year: "2009 looks set to be another challenging year. We are again budgeting very conservatively, with negative like-for-like sales for the full year." This is what Next today reported for 2009: sales targets were smashed; profits will be close to, or maybe just above, the record level of £498m achieved two years ago; and, since there are fewer shares in issue than there were in 2008, earnings per share will definitely reach an all-time high. You might call Next's performance a triumph in the face of adversity if it were not for the fact that many other high-street retailers will be telling a similar story – a sluggish first half of 2009 was followed by a strong second half. That was John Lewis's story and Marks & Spencer should follow (even though, unlike Next, it won't get remotely close to record profits). The truth is that, despite the gloom 12 months ago, consumers have continued to spend heavily in shops. Wolfson identified the crucial ingredient: the fall in employment has been much lower than the increase in unemployment because of widespread acceptance of part-time working. In the background, ultra-low mortgage rates have put cash in consumers' pockets. Can it last? Wolfson fears not, citing tax increases, possible interest rate rises and possible reductions in employment as government spending is cut. On the other hand, even his "cautious" view imagines Next returning a similar level of profits. That, though, says more about Next, which is a class act . Wolfson is right on the basic point – tougher times for most retailers were delayed but will arrive eventually.