Next customers issued warning as major checkout change coming to stores

Next is set to trial self-service tills this year, following a warning about a £67 million increase in wage costs after the Budget. Chief executive Lord Simon Wolfson spoke to Retail Gazette, revealing that the first batch of machines will be installed in select stores around February and March.

If the trial proves successful, a wider rollout could occur later in the year. Lord Wolfson explained that the business is aiming for "small improvements and operating efficiencies" in light of the impending rise in employer National Insurance contributions and the minimum wage, which are due to come into effect in April.

This may lead to customers using self-service machines for product returns. He elaborated: "You could self scan and return and put it in a secure locker rather than take it to a till."

However, Lord Wolfson assured that Next is not planning redundancies, stating: "As we get natural turnover in our staff, where we introduce efficiencies, we will take on less new people rather than lose existing people."

Despite these measures, earlier in the week, Next announced it would need to implement an "unwelcome" 1% price increase to mitigate the financial impact, reports the Mirror.

The company anticipates this will compensate for approximately £13 million of the increased wage bill. From April 6, employers will face a higher National Insurance rate, rising from 13.8% to 15%, and the earnings threshold for when this tax is paid will drop from £9,100 per year to £5,000.

Minimum wage in the UK is set to rise by 6.7%, with significant increases across all age brackets. For individuals aged 21 and over, the minimum wage will bump up from £11.44 an hour to £12.21 an hour, while young workers aged 18 to 20 will witness their pay go up from £8.60 an hour to a round £10 an hour.

Apprentices and those under 18 are also set for a raise from £6.40 an hour to £7.55 an hour.

This financial forecast comes as retail giant Next reports a healthy 5.7% rise in their underlying full-price sales for the fourth quarter, leading them to enhancing their full-year pre-tax profit outlook for an impressive 10% increase to hit £1.010 billion. That's a notch above the previously projected 9.5% growth to £1.005 billion – news that has given their shares a decent 2% lift.

However, looking ahead to the new financial year stretching to January 2026, Next anticipates a deceleration in sales growth to just 3.5% and forecasts profits to climb by a more conservative 3.6% to £1.05 billion. Sharing their economic insight, Next has said: "We believe that UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy."