Retail giant Next has announced an uptick in profits in the first half of the year, but warned it expects "anaemic growth" at best looking forward.
For the six months to July 2025, Next has reported a statutory pre-tax profit of £509million, a jump of 17.8% on the corresponding period last year.
Statutory revenue also leapt just shy of 10% to £3.145billion.
But despite the positive figures, Next chief executive Lord Wolfson of Aspley Guise forecast "anaemic growth" at best going forward and referenced new brands "cannibalising" existing business.
He also pointed to government spending commitments "beyond its means", new regulations hindering market competition and the impact of AI on the job market.
Writing in the company's half-year report, Lord Wolfson stated: "By Next standards, the last few paragraphs might sound a little gushing. A worrying state of affairs for any business – particularly so following a season where favourable weather and competitor disruption have enhanced our performance.
"Rest assured, the company’s enthusiasm for its many opportunities is grounded in a cautious realism.
"There is a balance here; we want to encourage enthusiasm for new ideas, but must resist the temptation to overestimate the net sales generated by new initiatives. It is easy to forget that new brands, to some extent, compete with and cannibalise our existing business.
"This cannibalisation is never 100%, so innovation still drives net growth – but it is a reason to be measured about the overall impact on our top line. More importantly, standing still is not an option – if we don't pursue these opportunities, competitors will.
"There is another reason to be cautious. The medium to long-term outlook for the UK economy does not look favourable.
"To be clear, we do not believe the UK economy is approaching a cliff edge.
"At best we expect anaemic growth, with progress constrained by four factors: declining job opportunities, new regulation that erodes competitiveness, government spending commitments that are beyond its means, and a rising tax burden that undermines national productivity.
"We first raised concerns about a potential weakening in UK employment in our report two years ago. Since then, vacancies have continued to fall, and PAYE payroll numbers are now moving backwards.
"The problem appears to be that employment, particularly at the entry level, faces the triple pressure of rising costs, increasing regulation, and displacement through mechanisation and AI."
FTSE100
The UK's flagship share index, the FTSE 100, was up 25 points at 9,231 shortly after opening this morning.
Brent crude oil futures were down 0.28% at $67.67 a barrel.
Companies reporting today
- Foresight Solar Fund - Half Year Results
- Next* = Half Year Results
- Renishaw - Full Year Results