Next to Raise Prices up to 8% Outside Europe as Middle East Conflict Adds £47m Cost

Next Plc announced a targeted price increase for several overseas markets, capping hikes at 8% per territory. The move follows an unexpected £47 million rise in operating costs this year, driven by higher fuel prices and supply‑chain disruptions tied to the US‑Israel‑Iran war.

The retailer had originally projected an extra £15 million in war‑related expenses, covering only the first quarter after hostilities began. Fuel costs spiked after the Strait of Hormuz—through which roughly 20% of global oil passes—was effectively closed by Iran. Disruptions to shipping lanes and logistics have pushed freight rates higher, adding pressure to Next’s cost base.

Despite the cost shock, Next expects to offset the full £47 million through a combination of price adjustments abroad and internal savings. In the UK and Europe, the company says currency gains and tighter cost controls eliminate the need for comparable price hikes. It forecasts no more than a 0.6% increase in UK prices, a figure set at the start of the year.

UK performance remains robust. Full‑price sales grew 6.2% in the first quarter, lifting the full‑year profit outlook to £1.22 billion, up from £1.21 billion. Retail outlets in Britain recorded a 4.4% sales increase, outpacing analyst expectations. The stronger domestic demand allows Next to keep price pressure low at home while shifting the burden to less price‑elastic overseas markets.

Internationally, sales dipped when the conflict erupted but have shown a modest rebound in recent weeks. The company plans to implement the price rises from May, tailoring the exact percentage to each country’s market conditions. By limiting hikes to a maximum of 8%, Next aims to balance cost recovery with consumer affordability.

The strategy reflects a broader trend among European apparel chains, which warn that prolonged Middle East instability could erode consumer spending. Next’s ability to maintain growth in the UK while managing cost inflation abroad will be a key barometer for the sector.

What to watch next: Monitor how quickly the price adjustments take effect in non‑European markets and whether fuel and logistics costs stabilize as the Middle East situation evolves.