Next says shortage of seasonal workers threatens to hamper festive services

Retailer Next has warned that Christmas deliveries could be disrupted unless the UK government relaxes post-Brexit immigration rules.

Reporting its fourth profit improvement this year, the company said in its half-year results that it has yet to experience “material difficulties” in recruiting for stores and most functions at its head office. However, staffing for peak seasonal demand in warehousing and logistics is under pressure.

“We anticipate that without some relaxation of immigration rules, we may experience some degradation in our service as Christmas approaches,” Next said.

The clothing and housewares giant, led by Simon Wolfson, a Conservative peer and Brexit supporter, added that the shortage of truck drivers which has exacerbated difficulties in UK supply chains was “expected and widely anticipated for many months “.

READ MORE: Temporary visas should ease truck driver shortage

“For the sake of the wider UK economy, we hope the government will take a more decisive approach to the looming skills crisis in warehouses, restaurants, hotels, nursing homes and many seasonal industries. A demand-driven approach to ensure the country has the skills it needs is now vital. ”

The group also predicted further cost inflation, with fashion prices expected to rise 1% in the first half of next year and household goods by 6%. However, he called the increases “not too serious”.

Pre-tax profits for the six months ending July were up 5.9% from the same period two years ago, which Next chose as the basis of its presentation as a more meaningful comparison than the exchanges. disrupted by Covid of 2020. The pre-tax figure of £ 347m was accompanied by a 7.6% increase in sales to £ 2.2bn.

READ MORE: Labor shortages jeopardize economic recovery

Online sales were up 52% ​​from two years ago, while in-store sales revenue fell 38% to £ 540.1million.

However, when opening in mid-April, the recovery in in-store sales was “much stronger” than expected, while online sales declined less than expected. The positive trend continued from August into the second half of the year, despite stockouts caused by Covid-related disruptions and high sales volumes.

Next is now forecasting £ 800million in pre-tax profit for the full year, 6.9% more than in 2019 and £ 36million more than its previous forecast for 2021. Its sales forecast at full price forecast a 10% increase for the remainder of this year. year.

Shares of Next closed up nearly 4% yesterday at 8,394p per share.

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