Next faces shareholder pressure over worker pay
Shareholders in Next are set to put pressure on the retail giant to take action on its “reliance” on low-paid labour.
At Next’s annual general meeting on Thursday, a group of investors will call on the retailer to take further action on worker pay and adopt the “real living wage” for all employees.
But the clothes retailer has hit back, claiming that its profits are “moving backwards” solely due to the cost of labour.
The 12 shareholders behind a letter calling for action on low pay include BNP Paribas Asset Management, Border to Coast Pension Partnership, PIRC and Achmea Investment Management.
At Next’s AGM last year, 27 per cent of investors backed a resolution calling for the FTSE 100 firm to disclose its pay structure and reasoning.
Chief executive pay ‘240 times’ worker salary
“This is a significant level of backing and, we hope, sent a clear signal to Next that their shareholders take low pay and the potential financial impact that this can have on their business and the wider economy seriously,” the investors will say on Thursday.
The letter continues: “Given the level of support, we would like Next to review its approach to setting base pay with a view to raising the level of pay beyond the National Living Wage towards a real living wage.”
The real living wage is a voluntary benchmark, calculated by the Living Wage Foundation and based on the cost of living.
The investors point to the pay of chief executive Simon Wolfson, a widely respected and hugely successful City leader, who took home a bumper £7.4m pay packet last year and could notch up to £9.3m next year.
Ruan Opie-Meres, senior campaign officer at Share Action, said: “At a highly profitable retailer where 93 per cent of staff are still paid the legal minimum while Lord Wolfson is taking home more than 240 times that of lower-paid workers, investors continue to ask questions about the how sustainable this is.
“The investor group calls for Next to build on its improved transparency by reviewing its approach to setting base pay, with a view to raising the level of pay to the real living wage reflecting the true cost of living and the realities workers now face.”
Pay ‘determined by market forces’
Colin Baines, stewardship manager at Border to Coast Pension Partnership, which invests in Next, said the retailer should join its peers in becoming accredited as a living wage employer.
“Low and stagnant wages are leading workers to require government or charitable assistance to maintain basic living standards, and 18 per cent of those in poverty are in high work intensity families.
“This growing problem has the potential to hit demand in important markets as well as company reputations and performance,” Baines said.
A Next spokesperson said the company would risk inflating prices or harming its profits if it hiked pay above the market rate.
“Next’s position is that minimum pay levels are a matter for [the] government, not individual businesses and that what Next ultimately pays is determined by market forces.
“Next believes that no company can afford to delegate control over its largest cost (labour) to a third party that has no official standing, especially at a time when Next’s retail profits are moving backwards entirely due to the cost of labour,” they added.
The retailer took £1.2bn in pre-tax profit the year to January 2026, a jump of 15 per cent from the previous year, as sales rose 11 per cent to £7bn.