Next to hike prices abroad up to 8% as Iran war costs bite
Next to hike prices abroad up to 8% as Iran war costs bite
Next plans price hikes outside Europe up to 8% to cover £47m in war-related costs, while UK sales beat expectations and UK price rises remain limited.
Next plc has signalled price rises outside Europe of up to 8% in several markets, as it braces for millions of pounds in extra costs tied to the US-Israel conflict with Iran. The retailer said it now expects an additional £47m in costs this year from higher fuel prices and ongoing disruption to global supply chains linked to the Middle East war. The company had previously guided to around £15m in extra costs, a figure that was revised up after the first three months following the attacks on Iran. It noted that fuel prices have surged amid concerns over the Strait of Hormuz, a key shipping lane, and that this has fed through to logistics and operating costs in multiple regions.
Next reported that UK sales were stronger than anticipated in the first quarter, rising 4.4%, and that it does not expect to hike prices in Britain beyond the 0.6% increase forecast at the start of the year. Instead, it plans to offset the extra £47m through a combination of price increases in international markets and cost-saving measures designed to improve factory-gate pricing and margins.
The retailer lifted its full-year profit forecast to £1.22bn from £1.21bn after stronger-than-expected sales at full price in the period, with first-quarter full-price sales up 6.2%. Management emphasised that the UK performance remains a bright spot even as international prices creep higher. The group attributed the elevated costs to fuel and supply-chain disruptions stemming from the Middle East conflict, but stressed it remains focused on maintaining price discipline in its home market while pursuing efficiency opportunities abroad.
Overall, the company said the anticipated international price hikes would help cover the additional costs without compromising its UK pricing strategy, and it remains confident in delivering its annual targets as it navigates evolving global trade dynamics.
