Next warns over price hikes and Christmas staff shortages

Fashion giant Next has hiked its full-year outlook once more after surging sales but warned over rising prices and staff shortages in the run-up to Christmas.

It said supply chain woes had seen higher freight costs push up prices by about 2% in the first half and cautioned this would continue into next year, with prices set to rise around 2.5% in the first half of 2022.

Next added that it was also seeing some areas of the business come under pressure from staff shortages, particularly in logistics and warehousing, which may affect its delivery service going into the peak festive season.

Chief executive Lord Simon Wolfson, a prominent Brexit supporter, called on the Government to take action to head off a “looming skills crisis”.

“We anticipate that, without some relaxation of immigration rules, we are likely to experience some degradation in our service in the run-up to Christmas,” the group said.

Lord Wolfson told the PA news agency the group may have to bring forward the next day delivery cut-off from 11pm, but stressed deliveries “won’t grind to a halt”.

He said the recent move to introduce temporary visas for EU lorry drivers was “late but welcome” and made a plea for the Government not to wait until shortages of skills in other areas becomes a crisis.

Next said: “The HGV crisis was foreseen and widely predicted for many months.

“For the sake of the wider UK economy, we hope that the Government will take a more decisive approach to the looming skills crisis in warehouses, restaurants, hotels, care homes and many seasonal industries.

“A demand-led approach to ensuring the country has the skills it needs is now vital.”

Lord Wolfson added: “I hope that going forward the Government looks further into the future and doesn’t wait until the crisis is upon it.”

The comments came as the group reported pre-tax profits of £346.7 million for the six months to July 31, down 16.5% on a year ago but up 5.9% on 2019 levels.