Retailer Next has called for the government to take a “more decisive” approach as it warned a lack of foreign workers could hamper Christmas shopping deliveries.
The business, led by Conservative peer Lord Wolfson, suggested that after the “widely predicted” HGV driver shortage crisis it should act to avert further looming problems in areas such as warehouses, restaurants, hotels and care homes.
Next also revealed that supply chain strains had taken their toll on sales while higher shipping costs were pushing up prices.
Despite the challenges, the retailer reported pre-tax profits of £347m for the six months to 31 July, 5.9% up on pre-pandemic levels, as full-price sales climbed by 8.8% – and also bumped up its expectations for full-year earnings.
Shares rose nearly 4% in early trading.
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But looking ahead to its peak trading season ahead of Christmas, it said it was concerned about recruitment in warehouse and logistics.
Unless immigration rules were relaxed, the retailer said, it was “likely to experience some degradation” in service in the run-up to Christmas.
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“Without the contribution of overseas workers to assist with these peaks, we suspect customer deliveries may take longer to arrive as we go into the peak trading season,” Next said.
The retailer 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,” it said.
“A demand led approach to ensuring the country has the skills it needs is now vital.”
Meanwhile, Next added that stock levels were “far from optimal ” – currently 12% down on 2019 levels – and this had “noticeably affected sales in some categories and in stores”.
It also said that price inflation of 2% – “more than we would like” – was being caused by higher shipping costs and looked set to accelerate to 2.5% in the first half of 2022.
Next’s results showed 52% growth in online sales on 2019 levels while in stores – affected by lockdowns – they were 38% lower.
It saw a boost from pent-up demand when shops reopened in April as well as warm weather in June, adding that sales more recently had been lifted by consumers taking their holidays in the UK.
That has prompted it to lift its sales growth guidance for the year as a whole to 10% and take its profit outlook to £800m, £36m more than previously guided.
Ministers are to kick off a search for the inaugural chair of the new football watchdog, even as it faces growing hints of opposition to its establishment from the Premier League.
Sky News has learnt that the Department for Culture, Media and Sport (DCMS) will launch the appointment process for the role at the Independent Football Regulator (IFR) as soon as this week.
The chair, who is expected to be paid a six-figure salary, will be responsible for overseeing a landmark period in the English game.
The regulator will have three primary objectives, including promoting clubs’ financial sustainability and the financial resilience of English football as a whole.
It will also be charged with safeguarding the heritage of clubs, including their badges and traditional playing colours.
The IFR will have the power to prevent clubs from joining breakaway competitions, inspired by the putative efforts of English football’s big six clubs to join a European Super League.
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Its establishment through primary legislation comes amid an ongoing impasse between the Premier League and English Football League about future financial distributions.
Gordon Brown, the former prime minister, is among the names who have been touted as potential chairs of the IFR.
Last week, Richard Masters, chief executive of the Premier League, warned in an article for The Times that more intrusive regulation could “undermine the Premier League’s global success, thereby wounding the goose that provides English football’s golden egg”.
A DCMS spokesman declined to comment on Thursday morning.
Crisis-hit Boeing has rushed to defend itself from fresh whistleblower allegations of poor practice, as the airline continues to grapple its latest safety crisis.
A Congressional investigation heard evidence on Wednesday on the safety culture and manufacturing standards at the company – rocked in January by a mid-air scare that saw an Alaska Airlines 737 MAX 9 flight suffer a panel blowout.
One Boeing quality engineer, Sam Salehpour, told members of a Senate subcommittee that Boeing was taking shortcuts to bolster production levels that could lead to jetliners breaking apart.
He said of Boeing’s 787 Dreamliner, that has more than 1,000 in use across airlines globally including at British Airways, that excessive force was used to jam together sections of fuselage.
He claimed the extra force could compromise the carbon-composite material used for the plane’s frame.
“They are putting out defective airplanes,” he concluded, while adding that he was threatened when he raised concerns about the issue.
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The engineer said he studied Boeing’s own data and concluded “that the company is taking manufacturing shortcuts on the 787 programme that could significantly reduce the airplane’s safety and the life cycle”.
Boeing denied his claims surrounding both the Dreamliner’s structural integrity and that factory workers jumped on sections of fuselage to force them to align.
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Two Boeing engineering executives said this week that its testing and inspections regimes have found no signs of fatigue or cracking in the composite panels, saying they were almost impervious to fatigue.
The company’s track record is facing fresh scrutiny amid criticism from regulators and safety officials alike in the wake of the incident aboard the Alaska Airlines plane.
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What’s going on at Boeing?
It has become a trust issue again after the worst period in Boeing’s history when two fatal crashes, both involving MAX 8 aircraft, left 346 people dead in 2018 and 2019.
All 737 MAX 8 planes were grounded for almost two years while a fix to flawed flight control software was implemented.
A separate Senate commerce committee heard on Wednesday from members of an expert panel that found serious flaws in Boeing’s safety culture.
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Boeing CEO: ‘We fly safe planes’
One of the panel members, MIT aeronautics lecturer Javier de Luis, said employees hear Boeing leadership talk about safety, but workers feel pressure to push planes through the factory as fast as they can.
In talking to Boeing workers, he said he heard “there was a very real fear of payback and retribution if you held your ground”.
Pressure on Boeing to focus on safety has included restrictions placed on production, limiting its manufacturing output.
At the same time, it is still facing three separate investigations by the Federal Aviation Administration, the Justice Department and the National Transportation Safety Board relating to the panel blowout.
It’s not quite a Mission Accomplished moment – the equivalent of that day in 2003 when George W Bush stood on an aircraft carrier and prematurely declared the Iraq war was over.
But Jeremy Hunt’s declaration in our interview in Washington DC that he had achieved a “soft landing” in the economy certainly has a whiff of wishful thinking about it.
Economists spend much of their time dreaming that, following a crisis, or a set of crises, they will be able to engineer a slow glidepath, ensuring there is no painful economic catastrophe. Yet it rarely actually happens.
Yet peer at the data and it’s hard to share his confidence.
With interest rates still at 5.25% and inflation still above target, the squeeze families have been facing in recent years has barely abated.
The UK is expected to grow at a slower rate than nearly every other G7 economy this year, according to the latest International Monetary Fund forecasts.
Yet the chancellor is not alone in clinging to optimism.
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Here in Washington, most central bankers and finance ministers are quietly hoping that all the economic and military challenges facing them – from war in Ukraine and the Middle East to China’s tensions with America – do not crystallise into something more horrifying and all-encompassing.
They, like Jeremy Hunt, would much rather keep on talking about soft landings.