The Middle East price shock hasn’t hit Next – yet | Nils Pratley

Timing lags in the retail industry mean the impact of fuel and fabric inflation may not be felt until autumn ranges land

In the context of Next, which has just reported full-year pre-tax profits of £1.16bn, an estimated £15m of extra fuel and air freight costs arising from the Middle East conflict is tiny. The sum, which in any case assumes disruption lasts three months, can be lost in the wash, or more precisely “offset by savings elsewhere”.

The chief executive, Simon Wolfson, a boss who tends to err on the side of caution when guiding on profits, saw no reason not to add £8m to this year’s number as a mechanical read-through from last year’s outcome. If there wasn’t a war on, one can assume there would have been a proper profit upgrade. After all, trading seems to have been going like a train up until late-February – “encouraging” in the UK and “strong” overseas.