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Living wage will drive up prices, says Next

Next has warned that it may have to increase prices 6% by 2020 to offset the cost of implementing the government’s national living wage.

The retailer, which currently pays staff £7.04 per hour, has estimated that the cost of implementing the £7.20 living wage next year will be £2m.

Next outlined its views in a trading update this morning, in which it revealed pre-tax profit rose 7.1% to £347.1m in the half year to July.

Full-price Next brand sales for the first half of the year were marginally ahead of expectations, up 3.5%. Lower markdown sales meant total Next brand sales were up 3.3% to £1.9bn.

Next Directory sales were up 8.2% to £767m. Retail sales edged up 0.2% to £1.1bn.

There is no change to the full-year sales and profit guidance.

Readers' comments (2)

  • will they pay suppliers an additional 6%?

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  • Wow all this moaning about the wage they call "THE LIVING WAGE"
    We are not talking about a fortune in fact it should be called the Exisiting Wage!

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