Next has said that the Middle East conflict could lead to higher prices for its customers.

The fashion retailer said that the war would add £15 million to its costs, working on the assumption that the conflict would last three months. It warned that prices would have to rise if the war continued longer than that.

Next said it was currently offsetting its extra fuel and air freight costs with savings elsewhere. It said it did not anticipate any impact on profits for the year ahead.

The British clothes brand increased its profit guidance by £8 million to £1.2 billion from January 2026 to January 2027, following better than anticipated revenues in January this year.

The business said its guidance was being raised despite its forecast that revenues in the Middle East, which comprise 6 per cent of its group sales, could be negatively affected until the summer.

Pre-tax profits jumped 14.5 per cent to £1.16 billion from January 2025 to January 2026, while revenues were up nearly 11 per cent to £7 billion.

Sales were bolstered by strong overseas revenues, as well as increased revenues in-stores and online across the UK.

Next CEO Lord Simon Wolfson said: “As yet, we have no feel for the medium-term effects on supply chain resilience, freight rates, factory gate prices and consumer demand.

“Much will depend on how long the conflict persists, and how much permanent damage is done to the world’s energy infrastructure.

He added: “If the conflict persists, the costs are likely to be reflected in higher prices to consumers and disruption to our supply chain, both of which are likely to suppress sales.”

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