Next Raises Prices Up to 8% in Non-European Markets as Iran War Inflates Costs

BBC Business reported Wednesday that Next plc will lift prices by as much as 8% in certain markets outside Europe, blaming the ongoing US-Israel conflict with Iran for a dramatic surge in fuel costs and widespread shipping disruption.

Iran War Adds £47M to Next’s Annual Bill

The British fashion and homeware retailer now expects the Middle East conflict to cost it an additional £47 million this year. That figure dwarfs an earlier estimate of £15 million, which only accounted for the first three months following the outbreak of hostilities in late February.

The core problem is the Strait of Hormuz, a critical chokepoint carrying roughly a fifth of global oil and gas shipments. Iran has pledged to keep the strait closed while the US maintains its blockade of Iranian ports. That closure has sent fuel prices sharply higher and snarled global logistics.

Next said international price increases will begin this month. No single territory will face a rise exceeding 8%.

UK and Europe Shielded for Now

Next said British shoppers will not face additional price increases beyond the 0.6% rise it had already planned at the start of the year. The company expects to absorb UK cost pressures through factory-gate savings and improved margins rather than passing them on at the till.

European operations are similarly protected. Currency movements have offset higher input costs on the continent, removing any need for price action there.

Strong Q1 Gives Next Room to Manoeuvre

The company’s ability to hold UK prices steady reflects a resilient start to the year. Full-price sales climbed 6.2% in the first quarter. UK sales grew 4.4%, beating the company’s own internal targets. Management now sees full-year profit reaching £1.22 billion, up from a prior forecast of £1.21 billion.

Next also projects full-price sales growth of 5% across the full year, suggesting confidence the conflict’s disruption will not deepen significantly from current levels. Its forecasts assume fuel costs stay near today’s levels and that supply chain conditions neither improve nor deteriorate.

Broader Retail Pressure Building

Next is not alone in sounding the alarm. European apparel chains including H&M have warned publicly that a prolonged Middle East conflict will squeeze margins and dampen consumer appetite.

The jewellery group Pandora’s chief executive, Berta de Pablos-Barbier, separately told the BBC that consumer confidence remains fragile amid elevated inflation and high borrowing costs.

Shares in Next have fallen roughly 5% so far this year, even as the company maintains one of the more stable trading records in British retail. It rescued shoe chain Russell & Bromley from collapse earlier this year in a £2.5 million deal.

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