Next boss warns of 'dramatic' fall in entry-level jobs

The chief executive of retail giant Next, Lord Simon Wolfson, has warned of a "dramatic fall" in the number of entry-level job opportunities in the UK.

Lord Wolfson told the BBC that Next typically received 10 applicants for every shop-based role two years ago, but that figure has since risen to 19. "That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment," he said.

The warning comes as official data shows the unemployment rate for 16-to-24-year-olds at 16.2%, its highest level since late 2014 and more than triple the national general unemployment rate of 5%. High street retail and hospitality businesses traditionally provide many young people with their first experience of work.

Lord Wolfson urged the government to reverse tax hikes on employers and minimum wage increases, which businesses warn are impacting their ability to create entry-level and part-time roles. He stated that government policy changes have increased Next's annual wage bill by £70 million. In response, Next has reduced staff numbers in individual physical stores, expanded its online operations, and increased its use of automation, such as self-scanning returns lockers.

A Treasury spokesperson defended the minimum wage increases, noting they boosted pay for more than 200,000 young workers. The spokesperson also stated that employer National Insurance contributions are lower when hiring workers under the age of 21. "Cutting wages for the lowest paid during a time of global uncertainty is not the answer," the spokesperson said, pointing to a £2.5 billion youth employment support package aimed at delivering one million opportunities.

A spokesperson for the Department for Business and Trade said the government's budget has stabilized the economy and delivered vital support. "Lord Wolfson, who earned more than £7m last year, will understand just how important our measures to make work pay are for the financial and job security of working people," the spokesperson added.

Lord Wolfson also criticized the upcoming Employment Rights Act, warning that its provisions would make it "going to get much harder" to offer flexible extra hours to staff. Under the proposed reforms, employers must offer guaranteed hours to casual workers to limit zero-hours contracts. Lord Wolfson argued this reduces flexibility during seasonal peaks, stating, "the risk is you then have to contract for those hours forever."

"You can't afford to... have the same number of people in your shop in February as you have in and around Christmas," Lord Wolfson said. "That's going to be bad news for our colleagues who want extra hours, particularly students who, in holiday time, need extra hours, and of course bad news for customers because service won't be as good."

However, the Trades Union Congress (TUC) disputed these concerns, calling the policy "hugely popular." A TUC spokesperson said the right to a regular-hours contract "is set to be based on a reference period over several months which will even out peaks and troughs," meaning it would not impact temporary holiday jobs. "This will give insecure workers on variable hours security in their working lives which they are so badly lacking at the moment," the spokesperson said.

Despite the challenges, Next remains highly profitable, recently raising its full-year profit expectations to £1.2 billion after first-quarter sales grew by 6.2%. The firm employs over 30,000 people and has acquired several struggling brands, including Joules, Fatface, Cath Kidston, and Made.com.

Lord Wolfson rejected suggestions that the retailer prioritized shareholders over employees, explaining that Next is owned by hundreds of thousands of modest savers. "The average dividend we'll pay out to an individual saver will be around £300 a year," he said, adding that businesses must remain profitable to survive. "If you look at retail over the last 25 years... 70 to 80% of the names that were there then have gone. And what you can't do is say, we just won't run the business for profit because if you don't run the business for profit, you just don't stay in business," he said.

To address wider employment issues, Lord Wolfson suggested the government focus on reforming planning laws, energy policy, and transport infrastructure to boost economic growth. He cited planning restrictions as a key bottleneck, noting that the cost of an agricultural acre in south-east England rises from £15,000 to £1.5 million once planning permission is granted. "All of these things are holding the economy back and if government could just take its foot off the brakes, we could have a much, much faster growing economy," he said.