Pressure on revenue is worse than consequences of financial crisis, warns Next chief Business

The Next boss said the current pressure on revenue was worse than the damage wrought by the financial crisis, as the retailer warned the war in Ukraine would fuel an 8% price hike this fall.

Responding to a question about how the current environment compares to the crisis in the cost of living in the fallout from the financial crisis, Lord Wolfson, chief executive of Next, said: ‘I think it’s a lot more widespread. We saw increases in our own prices at the time [2011] about 4-5 pcs in autumn/winter.

“What we see now is very different because the increases are much higher and also what we see that we didn’t see in 2011 is also a strong increase in wages. And that’s the hardest thing.

“Actually, we have a glimpse of our history and 2011, but we’ve never seen anything like this before, we don’t quite know how it’s going to play out.”

It came as Next said it would raise prices by an average of 8% this fall amid staff shortages and disruption from Russia’s invasion of Ukraine. The retailer said homeware prices would rise 13% and clothing prices would rise 6.5% in the second half.

Next still predicts that sales will increase this year, but not as much as expected, as consumer confidence will be more subdued. Profits are expected to reach £850million this year, although that is £10million lower than expected in January following its decision to halt sales in Russia and Ukraine.

As a result, sales will be £85m lower, the company said.

Lord Wolfson said high shipping costs were a major driver of inflation.

He said: “The best case scenario is that we are looking at a release of pressure in nine to 12 months.”