The head of high street chain Next has predicted ‘anaemic’ economic growth and warned there ‘very little by way of solutions to it and some things that potentially make it worse’
Fashion giant Next has revealed a battle for jobs – with 67 people fighting for every post.
The high street heavyweight says store staff vacancies have crashed by more than third in the past two years, as current workers spooked by the go-slow economy stay put.
Yet applications for shop work have rocketed by 72% over the same period, with 16 job hunters for every opening. It is even more of a contest for head office roles, with applications surging by 121% since 2023, and 67 people after each vacancy.
The leap comes as critics say the government’s hike in firms’ national insurance contributions has driven up the cost of employing people, at the same time as the rapid adoption of artificial intelligence begins to replace tasks done by humans.
Next boss Simon Wolfson warned these increases costs had sped-up the shift. He told the Mirror: “Our sense is that you are not going to see large numbers of people losing their jobs.
“This is not like a whole industry going under like happened in the 80s, like with coal. This is almost every industry just becoming slightly more mechanised, introducing AI and productivity measures in response to rising costs.
“My guess is that effect will be felt most by those seeking to enter the workforce or move jobs, rather than those already in work.”
Lord Wolfson, a Tory peer, called Labour’s new Employment Rights Bill “well-intentioned” but warned it could have the “unintended consequences” of reducing jobs even further, and hitting pay. In particular, he flagged the extension of protections for zero hours workers to those on “low hour” contracts, the details of which have yet to be ironed out.
“The reality is that it will be very hard for companies to offer people who are on low hours contracts extra hours,” he said. “It will mean we will have to fill those with temporary staff, or not all.”
It came as he warned the UK faced “anaemic” economic growth in the years ahead. “We are not expecting a cliff edge,” he said. “I don’t think that’s going to happen. I think we will see anaemic growth and I can see very little by way of solutions to it and some things that potentially make it worse.”
For all his warnings, Next reported a near 14% jump in profits to £515million for the six months to the end of July. Sales were boosted by bumper weather, along with a cyber attack on Marks & Spencer, as the forced suspension of online clothing orders at its rival saw customers switch.
But Next cautioned that the weak economic outlook meant sales were set to grow in the second half of this year. Despite the go-slow economy, the Bank of England held interest rates at 4% saying the UK was “not out of the woods” on inflation, with taxes contributing to rising food costs.
Bank Governor Andrew Bailey said: “Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.”
The MPC said it was being cautious about cutting borrowing costs until it had more evidence that pressures on UK inflation were easing.