Shoe Zone, the beleaguered UK footwear retailer, has pinned the blame for a fresh wave of store closures on cost pressures stemming from October’s budget measures.
The Leicester-headquartered chain, which currently employs around 2,250 staff across 297 stores, said new financial burdens—especially higher national insurance contributions and an increased minimum wage—had pushed some outlets beyond the point of viability.
In a statement underscoring “very challenging trading conditions”, the company highlighted strained consumer confidence following the Chancellor’s latest budget, weaker-than-expected spending by shoppers, and poor weather affecting footfall. Together, these factors forced Shoe Zone to downgrade its profit expectations for the year to 27th September 2025 to “not less than £5 million”—roughly half its previous target of £10 million.
“This year’s budget, announced by Rachel Reeves in October 2024, has intensified cost pressures and impacted consumer sentiment. As a result, certain stores can no longer be maintained,” Shoe Zone said. The retailer confirmed it would not pay a final dividend for 2024.
Investors reacted sharply, sending shares down by 38.5 per cent to 85p. This further decline caps a challenging year, with the stock having fallen by two thirds over the past twelve months.
Shoe Zone, founded in 1980, is well-known for its budget-friendly footwear—an average price point of about £13.30 per pair—and operates from a mixture of high street, retail park, and online sites. Although the company has been gradually closing loss-making stores to streamline its portfolio (26 net closures in the last financial year), management had been hoping to stabilise or improve financial performance through incremental measures such as store refurbishments and larger-format outlets.
However, the surprise escalation in wage and tax costs appears to have accelerated the closure programme. While no specific number of further closures was disclosed, the business is clearly adopting a more defensive posture in the face of economic headwinds.
Analysts were divided over the chain’s justification for pinning closures on the budget. Some questioned the logic, noting that shoes are typically considered non-discretionary purchases. Yet, others pointed to Shoe Zone’s history of prudent cost management and store transformation efforts, suggesting the retailer is simply taking a disciplined approach to store economics, refusing to subsidise loss-making branches in such uncertain times.
Zeus Capital, for one, acknowledged the group’s resilience, citing strong underlying fundamentals: zero financial debt and a track record of restoring dividends once trading conditions allow. While investors may find little comfort in near-term turbulence, Shoe Zone’s swift and decisive response to shifting economic pressures may ultimately serve its longer-term interests.
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Shoe Zone highlights recent budget pressures as it prepares to close more stores