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Simon Wolfson, chief executive of fashion chain Next, today warned that the High Street cannot look for any recovery in consumer spending until at least 2010.
Revealing another slide in profits for the six months to the end of July, Wolfson said that the group was budgeting for another fall in sales in the autumn and winter fashion seasons.
But he also said the company was bracing itself for "another tough year in 2009-10".
"It is impossible to say what might happen further out," said Woolfson. "It's gloomy out there but the business is coming through in pretty good shape."
Once again growth in online sales and profits through Next Directory countered falls at the 353 stores. But tighter management controls of stock meant that the value of clothes knocked out in the sale was 20% lower than last year.
Woolfson said that the medium-term outlook showed little sign of relief for the consumer either with tax cuts or interest rate reductions.
He also warned that the clothing sector faces rising costs because of the weakness of the pound against the dollar.
The global fashion market prices everything in dollars and while retailers buy forward and manufacturers generally don't pay their staff in dollars, Wolfson says prices will have to go up for 2010.
First-half profits fell 12.4% to £173.5million. The company said it still expects full-year profits to come in within analysts' forecasts of
£400million to £440million, down from £498million last year.
In the short term, Wolfson said, Next's customers are feeling the effects of higher food and fuel prices but are particularly hard hit by higher refinancing costs for mortgages.
He said: "Whilst the decline in house prices has little impact on customers' day-to-day expenditure, the slowdown in the housing market is very likely to affect sales of home furnishings."
Second-half shop sales are likely to fall again by between 4% and 7%, while Wolfson expects Directory sales to be between flat and 2% better.
Earnings per share only fell by 2.8% as the continuing share buy-back countered the fall in profits. As expected, the first-half dividend is held at 18p a share.
Comet fails to shine as sales dive
Sales at the Comet electricals chain plummeted nearly 10% in the past three months as cash-strapped shoppers held off buying big items such as washing machines and fridges.
The figures were twice as bad as most analysts had been predicting, and Comet owner Kesa said the chain would now make a loss in the first half of its financial year.
Comet's woes came soon after its bigger rival DSG, which owns Currys.digital, PC World and the Dixons websites said sales had plummeted 7% in recent weeks.
Kesa said trading conditions had got no better since the quarter that ended on 31 July.
Its French market-leading electricals store Darty saw sales fall 3.2% although profit margins remained stable.
