FASHION giant Next is experiencing a surge in sales but it issued a warning over rising prices and staff shortages in the run-up to Christmas.

The retail giant said supply chain woes had seen higher freight costs push up prices by about 2% in the first half and cautioned this would continue into next year, with prices set to rise around 2.5% in the first half of 2022.

Next added that it was also seeing some areas of the business come under pressure from staff shortages, particularly in logistics and warehousing, which may affect its delivery service going into the peak festive season.

The firm, which has two stores in Bradford, one each in Keighley, Guiseley and Birstall amongst other across the region, also called on the Government to take action on the lorry driver crisis and wider skills shortages.

A spokesperson for Next said: “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 comments came as the group reported pre-tax profits of £346.7 million for the six months to July 31, down 16.5% on a year ago but up 5.9% on 2019 levels, after full-price brand sales jumped 62% year-on-year and were 8.8% higher versus 2019.

It increased its full-year sales and profit forecasts for the fourth time this financial year after a “materially” better-than-expected performance over June and July.

Next saw full-price sales soar 20% against 2019 levels in the last eight weeks of the first half, while it said the second half had also got off to a strong start.

The group now expects sales to rise 10% on 2019 levels and pre-tax profits to reach £800 million for the year to January, up 6.9% on 2019 and above previous guidance of £764 million.

But it cautioned the performance may be hindered by rising costs in the wider economy, the supply woes and a potential hit to its delivery service from staff shortages.

“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 added: “The HGV crisis was foreseen and widely predicted for many months.

“For the sake of the wider UK economy, we hope that the Government will take a more decisive approach to the looming skills crisis in warehouses, restaurants, hotels, care homes and many seasonal industries.

“A demand-led approach to ensuring the country has the skills it needs is now vital.”