Fashion retailer Next has today reported a 13.8% rise in first-half profit and stuck to its full-year profit forecast but said it remained cautious about trading for the rest of the year, expecting sales growth to slow.
The FTSE 100 company said it expects the strength of the job market to weaken in its second half to the end of January 2026, with the effects of April’s employer tax increases continuing to filter through into the economy, dampening consumer spending.
Next has around 460 stores in the UK and Ireland and an online presence in over 70 countries selling the Next brand and more than 700 other brands. With the UK accounting for around 80% of its sales, it is considered a useful gauge of how British consumers are faring.
The group, whose shares are up a quarter so far this year, said it still expected second-half full-price sales growth to slow to 4.5% compared to growth of 10.5% in its second quarter when it benefited from a cyberattack at rival Marks & Spencer.
Next maintained its forecast for full-year pretax profit of £1.105 billion, up from £1.011 billion in 2024/25. Pretax profit was £515m in its first half to the end of July.
While industry data last week showed British shoppers spent more in August, retailers are uneasy about how consumer confidence and spending could be impacted by tax rise speculation in the run-up to the budget on November 26. They are also worried about the prospect of rising unemployment.
Last month, 60 retail bosses wrote to finance minister Rachel Reeves, appealing to her to avoid imposing further taxes on the sector in the budget.
Next CEO Simon Wolfson said the medium to long-term outlook for the UK economy did not look favourable.
“At best we expect anaemic growth, with progress constrained by four factors: declining job opportunities, new regulation that erodes competitiveness, government spending commitments that are beyond its means, and a rising tax burden that undermines national productivity,” he said.
UK economy to see declining job opportunities, says Next boss
The UK economy will see a dramatic decline in job opportunities, particularly at the entry level, the boss of fashion retailer Next said today, partly blaming Labour government policies.
Wolfson, also a Conservative peer who sits in the upper house of parliament, said employment was facing the triple pressures of rising costs, increasing regulation, and displacement through mechanisation and AI.
“I think what we will see is vacancies declining quite dramatically in the economy,” Next CEO Simon Wolfson told Reuters in an interview.
“You’ll begin to hear more and more people who are leaving full-time education or are looking to re-enter the workforce talking about how hard it is to find jobs,” he said after Next reported first half results.
Wolfson, in the job for 25 years and by far the longest-serving head of a FTSE 100 business, said Next’s own job vacancies are down around 35% and applications for jobs are up around 75% compared to two years ago. His company employs 41,000 people in the UK.
Official data published this week showed the UK jobs market lost a little more steam, with the number of workers on firms’ payrolls falling for a seventh month in a row and broader wage growth edging down.
Wolfson has previously said that the Labour government’s Employment Rights Bill will hinder recruitment, and said its Renters’ Rights Bill “will serve to make that market more static”.
He said he expects “anaemic growth” at best for the UK economy over the medium to long-term. Progress will be constrained by not just declining job opportunities and new regulation but also government spending commitments that are beyond its means, and a rising tax burden that undermines productivity, he said.
“There’s very little by way of policy we can see that’s going to stimulate the economy, and a number of bills (legislation) that pose a risk to growth,” Wolfson added.
However, he described as positive government proposals to speed up and relax the construction planning process.
