UK customers will dodge the worst of worth rises, says Next, because it defies gloom with revenue improve

Next has upgraded its profit outlook and suggested UK shoppers will avoid steep price increases related to the war in the Middle East.

The FTSE 100 retailer said it is raising its annual profit guidance by £8million to £1.128billion due to ‘exceptionally strong growth’ in the first five weeks of the year. 

It came as the retailer reported better-than-expected sales growth of 6.2 per cent over the 13 weeks to 2 May, compared with a year earlier, defying the pessimism felt elsewhere on the High Street. 

The retailer said it now does not anticipate raising UK prices ‘over and above’ a 0.6 per cent forecast it had given at the beginning of the year.

Price rises overseas will begin this month and will ‘vary by country, but will be no more than +8 per cent in any territory,’ the business said.

Next said it will mitigate the increases relating to the war in the Middle East, including through price increases outside of Europe

Chief executive Lord Simon Wolfson had suggested prices could rise between 4 and 10 per cent in the autumn, when the business last updated the City in March.

He had speculated that prices could begin to increase by about 1 per cent from June or July if the conflict continued to disrupt global supply chains.

Next now estimates that the Middle East conflict will add £47million to its costs as fuel and distribution become more expensive across the world.

But it said it is able to offset these increases by currency gains, better-than-expected prices with its factory suppliers and ‘modest’ price increases outside of Europe.