British multinational retailer Next has joined other UK firms in warning that tax hikes could result in a cost increase of up to £7 billion per year.
Expecting slow sales growth in the new financial year, Next attributes this to Budget measures that will also raise prices for consumers.
As one of the largest fashion and lifestyle retailers in the UK, Next anticipates a one percent price increase and a significant sales decline due to government policies taking effect in April.
Facing a £67 million surge in wage costs in the year up to January 2026, Next is among the British brands warning of looming price hikes to counter escalating business expenses.
According to a survey by the British Chambers of Commerce (BCC),
55 percent of firms expect prices to rise due to increasing labor costs.
Government policies announced by Chancellor Rachel Reeves in October will incrementally raise business costs over the next year.
Employer National Insurance Contributions (NIC) and National Living Wage hikes will begin in April, followed by changes to border operations in July and increased costs related to managing packaging waste in October through the Extended Producer Responsibility for Packaging initiative.
“We believe that UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy,” Next said.
Tax Concerns
Next, competing with major UK retailers like Marks & Spencer, John Lewis, Primark, and H&M, voiced concerns over Budget measures and their impact on prices and employment.
They cautioned that industry costs could increase by up to £7 billion annually, potentially resulting in job losses and higher prices for consumers.
The government justified its decisions by citing the need to support failing public services and address a £22 billion financial deficit inherited upon taking office.
The BCC urged ministers to expedite business rates reform and create incentives for investment to alleviate tax concerns among UK businesses.
Sales Growth
In the upcoming financial year until January 2026, Next predicts a 3.5 percent sales growth and a 3.6 percent profit increase to £1.05 billion.
Following a stronger-than-expected 5.7 percent rise in full-price sales for the current quarter, Next anticipates a slowdown in overseas sales growth after heavy marketing investments last year.
Addressing the increase in business costs through price adjustments, efficiencies, and cost savings, Next forecasts a one percent price hike to offset part of its higher wage expenditure.
While ruling out job cuts, Next plans to reduce hires for warehouses and retail stores by implementing high-tech solutions and not refilling vacant positions upon employee departure.
PA Media contributed to this report.
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