NEXT has cautioned over slowing gross sales progress in 2025 and stated it might want to hike costs because of the influence of current Funds measures.
The excessive road large stated it’s going through a £67 million surge in its wage prices within the yr to January 2026 after the Labour Authorities introduced plans to extend employer nationwide insurance coverage contributions and the minimal wage from April.
It stated it might want to push via an “unwelcome” 1% rise in costs as a part of efforts to assist offset the hit.
NEXT additionally warned that gross sales progress will pull again sharply over the yr forward because the Funds measures – which each take impact in April – are set to hit jobs and ship costs rising throughout the economic system.
It got here because the agency reported a greater than anticipated 5.7% rise in underlying full-price gross sales for its fourth quarter thus far, and upped its full-year pre-tax revenue outlook as soon as once more, pencilling in a ten% soar to £1.010 billion.
This compares with earlier steerage for a 9.5% rise to £1.005 billion.
However over the brand new monetary yr to January 2026, it expects gross sales progress to sluggish to three.5% and for group income to extend by a extra muted 3.6% to £1.05 billion.
NEXT stated: “We consider that UK progress is prone to sluggish, as employer tax will increase, and their potential influence on costs and employment, start to filter via into the economic system.”
It additionally warned that abroad gross sales progress – which had surged to 24% in 2024-25 – will fall again because it reins in advertising spend after investing closely on this over the previous yr.
“We don’t consider we will profitably improve our abroad advertising expenditure by the identical proportion subsequent yr, and count on the expansion to be nearer to twenty%,” it stated.
The agency stated an anticipated 1% improve in costs will offset round £13 million of its greater wage invoice.
It can look to make total financial savings of £23 million within the face of the associated fee improve, with measures additionally together with “improved working practices and different operational efficiencies in our warehouses, distribution networks and shops”.
