Retail large Subsequent has defied expectations for the essential Christmas buying and selling season, posting stronger-than-forecast gross sales however cautioning {that a} spike in wage prices will result in increased costs this yr.
Full-price gross sales on the clothes and homeware chain rose 6 per cent within the 9 weeks to twenty-eight December, beating Metropolis forecasts of 4.5 per cent. This progress – fuelled largely by on-line and abroad efficiency – led Subsequent to boost its annual pre-tax revenue steering by £5 million to £1.01 billion.
Regardless of celebrating its tenth consecutive revenue improve within the face of cost-of-living pressures, Subsequent struck a be aware of warning, citing a £67 million improve in wage prices for the yr to January 2026. The total-year influence will attain £73 million, pushed by a deliberate hike to employer nationwide insurance coverage contributions and the minimal wage from April.
In response, Subsequent informed traders it will elevate costs by 1 per cent to assist offset these further prices, warning of a possible drag on UK financial progress as increased employer taxes filter by to costs and employment selections.
Full-price gross sales for the approaching monetary yr are initially projected to rise by 3.5 per cent, with pre-tax earnings of virtually £1.05 billion for the yr to January 2026. Subsequent, led by chief government Lord Wolfson, stays one of many first main listed retailers to report on its Christmas buying and selling efficiency. Tesco and Marks & Spencer are set to publish updates quickly, whereas J Sainsbury will comply with on Friday.
Regardless of the seemingly upbeat vacation buying and selling, the British Retail Consortium (BRC) has cautioned that general sector efficiency has been tempered by gentle climate and extra cautious client spending. BRC figures present modest gross sales progress within the run-up to Christmas and mission a tricky begin to 2025, with client confidence dipping and store value inflation forecast at 1.8 per cent.
Subsequent will report full-year outcomes for the 12 months ending 25 January on Thursday, 27 March.
