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Next boss Simon Wolfson warns of inflation and labor shortages

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High street giant Next has slashed its sales and profit targets after shutting down its operations in Russia and Ukraine (PA) (PA Wire)

NEXT chief Simon Wolfson today warned of “chronic job shortages” and called on the government to reform laws that make it so difficult to build new homes.

Reporting a 10% rise in profits to £823 million compared to the pre-pandemic year of 2019, Lord Wolfson renewed his attack on immigration policies.

A day after Spring’s widely criticized statement that has led to predictions of the biggest drop in living standards since the 1950s, the prominent retailer said:

“We applaud the efforts that the Chancellor has made to help those most in need. But we are disappointed that the government has generally done little or nothing within its powers to increase the underlying supply of goods, energy and skilled workers. It is important to recognize that government interventions to ‘pay’ for inflationary increases do nothing to increase the underlying supply of goods and services”.

As a Tory supporter and Brexiteer, his words will sound curious to some.

Wolfson told the Standard: “Brexit was a decision about independence from Britain. It wasn’t about isolation. We can have an independent and open society. It is not Brexit that is affecting the cost of goods entering the country.”

Total sales are around £5bn a year, although they will be £85m less than they would be next year due to website closures in Ukraine and Russia.

About that war, he said: “In the midst of any crisis, it seems the worst of all. But if we take the right steps, we will come out ahead.” Some measures to mitigate inflation may be forthcoming, but prices will still rise 8% this fall, he warned.

He called on the government to “reverse the self-destructive barriers it has placed on overseas workers who support our economy and speed up, simplify and reform the planning process to increase the supply of desperately needed housing.”

Shares in Next rose 191 pence to 6,192 pence, from 4,130 pence five years ago.

The company is likely to close around 140 stores in the next 15 years as shopping habits change, but as an early adopter of the web, it is well positioned to succeed. Wolfson said the company has been “lucky” to do so well during the lockdown.

On the move to online shopping, Next said: “Consumers in even the most remote parts of the UK can enjoy a selection of products that would put the best of the world’s high streets to shame in the early 20s. 2000”.

Steve Clayton of Hargreaves Lansdown said:

“The business is running strong under unusual circumstances. Demand is holding up well, with stores operating above expectations, although part of this is a function of taking business off the website, after closures. Having previously sold well online in Russia, there is an obvious blow to take, but the business is more than strong enough to deal with it.”

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