Next blames clothes price rises on Budget wage costs

Next has announced that it volition rise prices connected immoderate covering to offset "an usually high" £73m summation successful unit wages and taxes.

The High Street retailer said that costs volition turn owed to measures announced successful the autumn Budget, including higher National Insurance payments by employers arsenic good arsenic an summation successful the National Living Wage.

Next expects prices to summation by 1%, which is beneath the existent complaint of inflation.

More than fractional of companies are readying to assistance prices implicit the adjacent 3 months to assistance with higher costs, the British Chambers of Commerce concern radical said this week.

Next said the terms emergence - volition offset astir £13m successful wage and taxation costs - was "unwelcome".

The terms summation volition lone beryllium connected definite items of clothing. Next besides said that shoppers person continued to displacement what they walk their wealth on. Instead of buying cheaper items, they are choosing mid to higher priced items.

"To beryllium clear, consumers are not needfully spending much overall, but buying fewer, marginally much costly items," the institution said successful a Christmas trading update.

"We judge that this inclination volition proceed into adjacent year."

The retailer besides said it expects UK income maturation to dilatory arsenic the National Insurance increases filter done into the wider economy.

But it inactive forecasts nett to emergence by 3.6% to much than £1bn adjacent year.

Richard Lim, main enforcement of Retail Economics, said determination were "challenging conditions connected the High Street".

He said retailers had seen "successive waves of disruption" and rising costs would "really compression margins".