Next warns HGV crisis could hamper Christmas deliveries and push up prices

The retailer warned that prices hikes could continue well into next year. Credit: PA

Retailer Next is the latest corporate giant to call on the government to urgently resolve the HGV driver crisis amid fears that staff shortages could hamper its Christmas deliveries.

The fashion chain warned of price hikes due to supply chain woes and higher freight costs that could continue well into the new year.

Next's CEO, Conservative peer and Brexiteer Lord Wolfson, criticised the government's handling of the HGV crisis saying it was "widely predicted for many months" and his business will suffer without "some relaxation of immigration rules".

The retailer urged ministers to take a "more decisive approach" to not only the haulier industry but also the wider "looming skills crisis" across warehouses, care homes, hospitality, and other seasonal industries.

Despite concerns over supply chains, the group reported pre-tax profits of more than £346 million for the six months to July 31 - down 16.5% on a year ago but up 5.9% on 2019 levels - and increased predictions for its full year sales.

However, it said supply chain strains had seen higher freight costs push up prices by about 2% in the first half, with prices set to rise around 2.5% in the first half of 2022.

Next added it was also seeing 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 business 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 HGV crisis was foreseen and widely predicted for many months," it added.

“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.

Next warned Christmas deliveries could be affected Credit: PA

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

The retailer's calls come after the government last week announced it would grant 10,500 three-month visas to foreign workers in a desperate bid to plug lorry driver and food supply shortages ahead of Christmas.

No 10's intervention came amid scenes of lengthy queues at petrol stations after a shortage of fuel tanker drivers forced some retailers to shut their pumps and ration sales.

But haulier bosses slammed the visa plans, with one former HGV driver telling ITV News that the government has a "snowball in hell's chance" of resolving the issues ahead of the festive season as the issues in the industry are "too deep-rooted".

The shortage of heavy goods vehicle drivers has been exacerbated by the Covid-19 pandemic, although there have been long-term issues in the UK with labour numbers amid an ageing workforce, low wages and poor truck stop conditions.

Meanwhile, other drivers from Europe told ITV News they were uninterested in the job offer, citing language barriers, Covid restrictions and Brexit uncertainty as key issues, while the three-month visa was too short to consider moving countries.