The prediction came as the High Street chain unveiled its annual results for the year to 30 January, showing a modest rise in profits.
Pre-tax profit was £836.1m, up from £782.2m a year earlier.
Next said the year ahead "may well be the toughest we have faced since 2008".
The firm's shares suffered their biggest one-day fall since December 2008, shedding £10.05 to £56.55.
Next, which has more than 500 stores, also downgraded its sales forecast for the 2016-17 financial year.
Previously it had expected growth of between 1% and 6%, but it said it now expected it to fall within a range of minus 1% to plus 4%.
Next said it believed there might be a "cyclical move away from spending on clothing, back into areas that suffered the most during the credit crunch".
It added that according to the latest figures available for consumer spending, "it can clearly be seen that growth in experience-related expenditure, such as eating out, travel and recreation, was much stronger" than in the clothing sector.
The retailer said its Next Directory online division had seen slowing growth.
"Partly this is as a result of competitors catching up with our delivery and warehousing capabilities; partly as a result of changes in the ways customers are shopping online," the firm's statement added.
It said its priorities included upgrading the online business while developing and expanding its UK retail store network.
"In many ways, we have more to do than ever before with complex challenges to our working practices across product, marketing and systems," Next said.
"It may well feel like walking up the down escalator, with a great deal of effort required to stand still.
"It will not be the first time we have felt this way, and our experience is that the effort put into improving the business in tough times can pay handsome rewards when conditions improve."
Next said it expected international online sales to grow by 25% in the coming year, to about £205m.
It said this rate of growth was "significantly lower" than last year, because it had now opened in all its target territories, including China.
"In addition, two of our largest markets, Russia and Ukraine, have both suffered significant currency devaluations," the firm said.

Welfare crews warned it risked death because it was so woolly from living in the wild for several years.
More than 40kg (88lb) of wool was removed in what the RSPCA says is the heaviest wool haul from one shearing.
National shearing champion Ian Elkins was urgently called in on Wednesday to tackle the mammoth merino.
Mr Elkins described Thursday's marathon sheering session as one of his biggest challenges, saying he had never seen anything like it in 35 years of work.
Chris the sheep had to be sedated during the very delicate operation.
Mr Elkins said he was proud Australia had claimed the title from New Zealand, likening it to "the rivalry on the rugby field".
The massive bundle of fleece tipped the scales at more than 42kg (92lb), but was revised down to 40kg (88lb) to counter the weight of the bag.
Animal welfare officials said Chris was "four-to-five times its normal size" before going under the knife.
In 2004, Shrek the New Zealand sheep was found after six years on the loose.
The animal - also a merino - later lost his giant 27kg (60lb) fleece in a televised shearing broadcast live around the world.
Retailer Next has seen its shares fall 15% after it forecast that 2016 would be a "challenging year" for its business, "with much uncertainty in the global economy".
[NEXT_CONCEPT]
An overgrown Australian sheep affectionately named Chris has set a new unofficial world record following a hair cut from five shearers.