Next to raise prices to help pay for rising wage costs

Next has said it will make an “unwelcome” rise to prices to help offset a £73m increase in staff wages and taxes.

The High Street retailer said that costs will rise 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 expects prices to increase by 1%, which is below the current rate of inflation.

More than half of companies are planning to lift prices over the next three months to help with higher costs, the British Chambers of Commerce business group said this week.

Next said increases in prices will offset around £13m in wage and tax costs.

It also plans to make other savings through more automation in its warehouses and lower bonuses.

The retailer said it expects UK sales growth to slow as the National Insurance increases filter through into the wider economy.

But it still forecasts profit to rise by 3.6% to more than £1bn next year.

Richard Lim, chief executive of Retail Economics, said there were “challenging conditions on the High Street”.

He said retailers had seen “successive waves of disruption” and rising costs would “really squeeze margins”.