Next has raised concerns about price increases due to rising costs and slowing sales growth
London: Retail giant Next is sounding the alarm about its sales growth slowing down in 2025. They’re saying they’ll have to raise prices because of some recent changes in the Budget.
Next mentioned they’re facing a hefty £67 million increase in wage costs for the year ending January 2026. This is mainly due to the Labour Government’s plans to hike employer national insurance contributions and the minimum wage starting in April. To help cover this, they’ll be implementing an “unwelcome” 1% price increase.
They also warned that sales growth is expected to take a hit in the coming year. The Budget changes, which kick in April, are likely to affect jobs and push prices up across the board.
Interestingly, they reported a better-than-expected 5.7% rise in full-price sales for their fourth quarter so far. They’ve even raised their full-year pre-tax profit outlook again, now expecting a 10% jump to £1.010 billion.
That’s a bit better than their earlier forecast of a 9.5% rise to £1.005 billion. However, for the new financial year to January 2026, they’re predicting sales growth will slow to 3.5%, with group profits rising by a more modest 3.6% to £1.05 billion.
Next believes UK growth is likely to slow down as the tax increases for employers start to impact prices and jobs in the economy.
They also mentioned that overseas sales growth, which had surged to 24% in 2024-25, is expected to drop as they cut back on marketing spending after a big investment last year.
Next stated, “We don’t think we can keep increasing our overseas marketing budget at the same rate next year, so we expect growth to be closer to 20%.”
To tackle the rising costs, they anticipate that the 1% price increase will help cover about £13 million of the higher wage bill. They’re aiming for overall savings of £23 million by improving working practices and boosting efficiency in their warehouses, distribution networks, and stores.
