Next has announced it will raise prices on its clothing to offset Budget-induced tax hikes and a £73million increase in staff wages.
The high street retailer told investors it will increase prices by 1% this year due to measures announced in the autumn Budget, including higher National Insurance payments by employers as well as an increase in the National Living Wage.
Next also warned of the negative impact on wider UK growth, which it said was “likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy.”
Next reported a 6% increase in full-price sales in the nine weeks to December 28, driven by strong online and overseas growth. Underlying full-price sales also rose by 5.7% against the previous year.
This rise added £27million to full-price sales, increasing full-year guidance for pre-tax profit in the year to January 25 by £5million to £1.01billion.
Despite reporting better-than-expected profits, Next has warned for the year ahead, citing the potential impact of rising employer taxes on prices.
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