In a trading update, the company, which has 460 outlets across Britain, said it saw like-for-like sales slip by 2.9 per cent in the 14 weeks to November 3, although that reflected an improvement from the 4.8 per cent decline seen in the first six weeks of the second half of its financial year.

Chief executive Simon Wolfson said he still expects annual profit to be in line with expectations.

Analysts had expected the firm to post a fall in same-store sales of 2.7 per cent for the period.

Mr Wolfson said: "The last eight weeks' sales have shown a significant improvement on the first six weeks."

He said the company, which has six stores in Edinburgh, was happy with its improvements.

However, Mr Wolfson said the business remains "cautious about the consumer environment, with many customers now experiencing considerable increases in mortgage repayments".

Next said trading remained extremely volatile, with good sales in September giving way to a disappointing October.