Next Raises International Prices Up to 8% as Iran War Inflates Supply Chain Costs

British fashion and homeware retailer Next will raise prices by as much as 8% across a range of international markets outside Europe, BBC Business reported Wednesday, as the US-Israel war with Iran drives up fuel and supply chain costs to the tune of £47 million this year.

Next Price Hikes Driven by Middle East Disruption

The company said the conflict has created a significantly heavier cost burden than originally modelled. Next had initially pencilled in roughly £15 million in additional expenses tied to the war, a figure that covered only the first three months of hostilities. That estimate has since ballooned to nearly £47 million as disruption to global shipping lanes and elevated fuel prices persist.

International price increases are set to take effect from May. The company stressed that no territory will face a rise exceeding 8%. UK and European customers are, for now, insulated from similar adjustments. In Europe, currency movements have effectively absorbed the cost increases. In the UK, the retailer said it expects to hold price growth at approximately 0.6% for the year, in line with its earlier guidance, by capturing savings at the factory level and improving margins through procurement.

A Strong Quarter Offsets the Gloom

Despite the cost headwinds, Next delivered a solid first quarter. Full-price sales climbed 6.2% year-on-year, with UK sales growing 4.4%, ahead of internal targets. That outperformance gave management enough confidence to nudge the full-year profit forecast higher, from £1.21 billion to £1.22 billion. The group also maintained a full-year sales growth target of 5.0%.

Also Read: How Middle East Shipping Disruptions Are Reshaping Global Trade

Iran War and the Broader Retail Backdrop

Next is far from alone in navigating the fallout from the Middle East conflict. The disruption to shipping routes through the Red Sea and broader Persian Gulf region has weighed on logistics costs across retail and manufacturing since the war escalated. Many European and UK retailers have absorbed costs quietly, but the scale of the impact is now becoming harder to contain for companies with larger global footprints. Next’s decision to pass costs on to international customers rather than domestic ones reflects both the currency dynamics in play and the competitive sensitivity of the UK market.

Next shares have shed roughly 5% in value since January, underperforming the wider UK retail sector year-to-date.

Also Read: Iran War Costs Explained: What the Conflict Means for Global Supply Chains

What Comes Next for the Retailer

The company’s outlook rests on a key assumption — that fuel prices remain broadly stable and that supply chain disruption neither deepens nor meaningfully eases. Any deterioration in either variable would likely force a reassessment of both the cost forecast and the price-hike ceiling currently set at 8%.

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