High Street giants Next and Greggs have both said they are raising prices as they seek to offset higher wage and manufacturing costs.
Next, which reported strong sales over Christmas, said its prices would increase by up to 6% next year.
Greggs, Britain’s biggest bakery chain, said it had raised prices between 5p and 10p on items across its range of sausage rolls and cakes.
A Greggs spokesman said the move was “very much a last resort”.
Next price hike
Next said that prices for its spring and summer clothing and homeware ranges would rise by 3.7% from a year earlier, while it expects a 6% increase for autumn and winter goods.
Its forecast came as it said sales for the three months to 25 December were up 20% compared with pre-pandemic 2019, boosted by a strong revival in “formal and occasionwear”.
Next’s online business saw sales soar by 45% from two years ago, whereas sales at its High Street stores were down 5.4%.
Next also upped its profit forecast for the year. It now expects to make an extra £22m, taking annual profits to £822m, which would be nearly 10% higher than in 2019.
The company is forecasting sales of full-price goods to rise by 7% overall in 2022, but it warned that this year could see a tougher trading environment, given the financial pressures facing households, such as higher energy bills.
Next also said it was facing higher costs itself, hence the need to increase its prices by more than previously expected.
The company said it had seen higher shipping and manufacturing costs. Wage costs were also climbing as a result of the increase in the National Living Wage and because of staff shortages in some areas, “most notably in warehousing and technology”.