Clothing retailer, Next, has warned shoppers they could face price rises of up to 5 per cent in 2017 following the decline in the value of the pound after the UK voted to leave the EU.
This is coming as cost pressures is likely hitting annual profits by up to 14 per cent. The warning comes as the firm reported a sales drop during the crucial festive shopping period.
Next shares depreciated more than 10 per cent in early trading after it warned that its profits would be at the lower end of its guidance after “difficult” Christmas trading.
Next has reported a 0.4% drop in full-price sales over its festive quarter to December 24,independent.co.uk reports.
The company said full-price sales fell by 0.4 per cent in the 54 days to 24 December compared with the previous year.
As a result, the firm cut its full-year profits forecast to £792m, compared with previous guidance of £785m-£825m, as it prepares for a “challenging” year.
Next said a slump in sterling is pushing up sourcing costs at a time when demand could be vulnerable due to a Brexit-induced squeeze on spending power.