High street chain Next has warned of price rises as a result of the UK’s vote to leave the European Union.
In its latest trading statement, the fashion retailer said it expected like-for-like garment prices to increase by up to 5% over the coming year because of the devaluation of the pound.
The firm also said it faced a number of other inflationary pressures in the year ahead. The National Living Wage, the Apprenticeship Levy and energy taxes would add another £13m onto costs, it predicted.
“The year ahead looks set to be another challenging year; therefore we are preparing the company for tougher times,” it said.
Next also revised its profit guidance for its financial year, which runs to the end of January, to £792m before tax. This is at the lower end of previous forecasts and down 3.6% on last year.
Sales in the last 52 days before Christmas were down 0.4%, and sales in the end of season sales were down 7% on last year, it said.
Meanwhile, the head of the Society of Motoring Manufacturers and Traders (SMMT) has also warned of price rises as a result of Brexit. Mike Haws, SMMT chief executive, said the year ahead “may well be more challenging as sterling depreciation raises the price of imported goods”. He told Sky News new car prices would rise by 2-3%.
Other companies to have announced price rises since the Brexit vote include Microsoft, Apple and Walkers Crisps and Unilever.
In October a price row broke out between Unilever and Tesco after the consumer goods manufacturer raised the price of products to meet increased costs caused by currency devaluation.
The makers of Toblerone became the subject of public outrage in November when it reduced the weight of its chocolate bars in order to control costs.
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