Retailer Next says Britain will need to relax Brexit immigration rules to save Christmas

Next, which trades from about 500 stores and online, said finding staff for warehousing and logistics jobs for the peak season was beginning to come under pressure. File picture

Next, one of Britain's biggest clothing retailers, warned it may struggle to deliver its normal service in the run-up to Christmas unless the UK government relaxes post-Brexit immigration rules to allow more workers into the country.

Britain is already facing disruption caused by worker shortages. A dearth of truck drivers in the world's fifth-largest economy is already threatening fuel supplies and has led to some gaps on supermarket shelves, with many blaming Brexit.

Next, led by the Brexit-backing Simon Wolfson, who had previously warned against cutting immigration, said its clothing and homeware stores and online shop could be affected in the run-up to Christmas.

"We anticipate that, without some relaxation of immigration rules, we are likely to experience some degradation in our service in the run-up to Christmas," the retailer said in its half-year results statement. 

Finding staff for warehousing and logistics jobs for the peak season was beginning to come under pressure, it said.

Stock levels down 12%

Next said its stock levels were currently down 12% compared with the period before the pandemic but said it had got better at operating with less stock. At the same time, the retailer raised its profit guidance as shoppers flocked back following the easing of Covid-19 restrictions. 

Shares in Next rose as much as 4% to a record high after it reported a 5.9% increase in first-half profit compared to 2019, before the pandemic disrupted trading. 

However, Next, which trades from about 500 stores and online, warned that soon "things may not be as good as they appear today", as the impact of pent-up demand, record savings ratios and lower spending on overseas holidays would diminish. 

"It also seems likely that increases in the cost of living, along with the potential effect of seasonal labour shortages on our delivery service, may moderate demand in the months ahead," it said.

Next made a pretax profit of £347m (€405m) in the six months to July, on full-price sales up 8.8% versus 2019. 

"I don't think we'll get to the point where we say 'we can't take any more orders'. That will not happen," said Mr Wolfson. 

"But it may be that the service levels we provide in that peak period won't be as sharp as the ones that we provide through the rest of the year." 

• Reuters