2016 will be a "challenging year" and could be "the toughest we have faced since 2008", Next has said.
The warning comes as the home and clothing retailer posted a modest rise in annual profits for 2015. Next reported a profit of £836.1 million, up from £782.2m in 2014.
Next's share price fell 10% in early trading this morning as it also downgraded its sales forecast for the current financial year. It had predicted sales growth of 1-6%, but "with much uncertainty in the global economy" it said are not likely to grow more than 4% and could even fall slightly.
In a statement, Next said: "Partly this [slowing growth] is as a result of competitors catching up with our delivery and warehousing capabilities; partly as a result of changes in the ways customers are shopping online.
"In many ways, we have more to do than ever before with complex challenges to our working practices across product, marketing and systems.
"It may well feel like walking up the down escalator, with a great deal of effort required to stand still.
"It will not be the first time we have felt this way, and our experience is that the effort put into improving the business in tough times can pay handsome rewards when conditions improve."