Next has warned that the attacks on container ships in the Red Sea will delay stock deliveries which will have an impact on sales.
Lord Simon Wolfson, chief executive of Next, told the PA news agency, if the container ships are still forced to bypass the Red Sea then it will take around another two and half weeks for stock to reach the UK’s ports.
Next issued a caution to shareholders in their latest trading update on Thursday that “some delays to stock deliveries” will continue if the Suez-Canal shipping route has to be avoided due to the Iranian backed Houthis militants who have been attacking vessels in the Red Sea.
Lord Wolfson told PA, “It could add another two to two and a half weeks to lead times in terms of getting stock to the UK.
“Because the ships have to travel further, there will be some level of surcharges.
“It will impact on sales if this persists for a long time, but not dramatic levels.”
Lord Wolfson said that the shipping delays will delay goods travelling from the Far East, however it will be “manageable.”
The retail giant said that their prices will remain flat throughout 2024 to January 2025 as their own costs were to be stable for the first time in around three years.
There are concerns for the retail industry due to the events unfolding in the Red Sea as prices could be pushed up for consumers.
Lord Wolfson warned that an increase to the National Living Wage means that Next will not be able to lower the price of their products.
Prices “would’ve been moving down, but we’re having to hold them flat,” but an extra £60 million wage bill is thought to hit this year.
Next said, “The consumer environment looks more benign than it has for a number of years, albeit there are some significant uncertainties.”
Shares rose 5% and Next has upped their profit forecast to £905 million in the year to 27 January, this will be a 4% rise on 2022/23.
Next are expecting a 5% rise in their underlying pre-tax profits to £960 million in the year ahead.
“The one thing we’re nervous about next year is employment and whether it will be able to remain as strong as it has been,” said Lord Wolfson.