Next warns of Christmas price hikes due to supply chain staff shortage
Retailer FASHION Next has warned that price hikes and staff shortages could impact its delivery operations as Christmas approaches.
Some areas of Next’s business have started to come under pressure from a shortage of overseas workers, especially in logistics and warehousing, which may affect its delivery service as the peak holiday season approaches.
The group’s chief executive, Simon Wolfson, is a strong supporter of Brexit and is now calling on the UK government to relax immigration rules and take a “decisive approach to the looming skills crisis”.
“We anticipate that without some relaxation of immigration rules, we may experience some degradation in our service as Christmas approaches,” the group said.
Wolfson said the next day’s delivery deadline may have to be moved forward from its current 11pm time, but said deliveries “won’t stop”.
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The group also warned of price hikes amid supply chain issues, with higher freight costs pushing prices up by around 2% in the first half of the year and further increases. are to come.
Then, prices will increase by around 2.5% on average in the first half of 2022, with fashion prices expected to increase by 1% and household items by 6%, as larger products bear the brunt of transportation costs. higher.
Wolfson said the recent move to introduce temporary visas for EU truck drivers was “late but welcome” and called on the UK government not to wait for skills shortages in other areas to become a problem. crisis.
Next said: “The heavyweight crisis has been foreseen and widely predicted for many months.
“For the sake of the wider UK economy, we hope the government will take a more decisive approach to the looming skills crisis in warehouses, restaurants, hotels, nursing homes and many seasonal industries.
“A demand-driven approach to ensure the country has the skills it needs is now vital. ”
Wolfson added: “I hope that in the future the government looks further into the future and does not wait for the crisis to be here.”
The comments came as the group increased its full-year sales and profit guidance for the fourth time this fiscal year after a strong increase in summer sales, helping stocks rise 3%.
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It reported pre-tax profit of £ 346.7million for the six months ended July 31, down 16.5% from a year ago, but up 5.9% from at 2019 levels.
The brand’s full-price sales jumped 62% year-over-year and increased 8.8% from 2019.
Then, full-price sales soared in June and July, up 20% better than expected from 2019 levels, as she said the second half had started well as well.
The group now expects annual sales to rise 10% from 2019 levels and pre-tax profits to reach £ 800million for the year through January, up 6.9 % On 2019 and above previous forecast of £ 764million.