The retail giant cut its outlook for UK sales growth in the second half on consumer spending concerns.
Retail giant Next has warned against tax increases in next month’s Budget as it said consumers were already under mounting pressure from Iran war inflation and a weak jobs market.
In its first-half results, Next cut its outlook for UK sales growth in the final six months from 2.8% to 2% as it flagged concerns over the impacts on consumer spending from the rising cost of living, higher mortgage costs and a cooling labour market.
Chief executive Lord Simon Wolfson said: “These worries will only be compounded if they are accompanied by tax increases.”
He added: “The tax burden is at its highest level for over 60 years and seems to us to be at the point where further increases only risk stifling growth – and lower growth is likely to only worsen Government finances – a vicious circle.
“In our view, the best outcome for UK growth would be a credible plan to get Government spending under control – eliminating the fear of higher taxes – alongside supply side measures to boost growth.”
The comments came as Next delivered yet another profit upgrade after half-year trading was “much better” than expected in the UK and its overseas.
It saw half-year UK full price sales rise 3.6%, with 7.4% growth online offsetting a 1.7% drop in stores, while international online sales jumped 23.9% despite price rises in some markets amid the Middle East conflict.
This helped underlying pre-tax profits rise 10.5% to £569 million in the six months to July.
Statutory pre-tax profits lifted 11.2% to £566 million.
Next now expects full-year profits to rise by 8% to £1.23 billion and sales to increase 6.7%, up from growth of 7.3% and 6.3% previously expected respectively.
