Next to Raise Prices Up to 8% Internationally as Iran War Drives Up Supply Chain Costs

BBC Business reported Wednesday that British fashion and homeware retailer Next plans to lift prices by as much as 8% in select markets outside Europe. The driver is an expected £47 million in additional costs tied to the ongoing US-Israel war with Iran.

Iran War Pushes Costs Well Beyond Initial Estimates

Next initially forecast £15 million in war-related costs. That figure covered only the first three months of US and Israeli military operations against Iran. As the conflict extended, fuel prices rose sharply and global shipping routes faced sustained disruption. The retailer’s revised estimate now stands at £47 million for the full year. The Strait of Hormuz, a critical chokepoint for roughly one-fifth of global oil and gas trade, remains effectively closed. Iran has signalled it will keep the strait shut as long as US port blockades continue.

UK and Europe Shoppers Shielded From Extra Increases

Despite the broader cost surge, Next said it has no plans to raise UK prices beyond the 0.6% it signalled at the start of the year. Savings at the factory level and improved margin management are absorbing the additional burden domestically. European operations are similarly insulated. Favourable currency movements in those markets have largely offset higher input costs. Price adjustments outside Europe will vary by territory but will not exceed 8% in any single market, the company confirmed.

Background: A Strong Quarter Ahead of a Difficult Year

Next has navigated an unusually turbulent trading environment. The conflict initially weighed on international sales. However, the company noted meaningful recovery toward the end of its first quarter, even if growth lagged the pace seen in the opening weeks of the year. UK sales grew 4.4% in the first quarter, beating internal targets. Total full-price sales rose 6.2% over the same period. Those results allowed Next to nudge its full-year profit forecast slightly higher, to £1.22 billion from £1.21 billion. The group now targets 5% full-price sales growth for the full year.

Wider Group Exposed to Ongoing Volatility

Next operates around 700 stores globally, with roughly 500 in the UK. The group also owns FatFace and Cath Kidston and holds minority stakes in Gap, Victoria’s Secret, and Reiss. That broad footprint means geopolitical shocks translate into meaningful cost exposure quickly. Shares in Next have fallen approximately 5% since the start of 2026, reflecting lingering investor concern over the durability of the Middle East disruption and its downstream effects on margins.

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