Shoe Zone, the beleaguered UK shoe retailer, has blamed a new wave of store closures on cost pressures stemming from October’s budget cuts.
The Leicester-headquartered chain, which currently employs around 2,250 staff across 297 stores, said new financial burdens—mainly higher national insurance contributions and lower pay rises—had forced some stores to move.
In a statement emphasizing the “extremely challenging trading conditions”, the company highlighted consumer confidence following the Chancellor’s latest budget, weaker than expected consumer spending, and poor weather affecting the population decline. Together, these factors have forced Shoe Zone to lower its expectations for the year to 27 September 2025 to “not less than £5 million”—about half the previous target of £10 million.
“This year’s budget, announced by Rachel Reeves in October 2024, has intensified cost pressures and impacted consumers. Because of this, some stores can no longer be maintained,” said Shoe Zone. The retailer has confirmed that it will not pay a final dividend for 2024.
Investors reacted strongly, sending shares down 38.5 per cent to 85p. This decline marks yet another challenging year, with the stock down two-thirds over the past twelve months.
Shoe Zone, founded in 1980, is well known for its budget-friendly shoes—the average price is around £13.30 a pair—and operates through a mix of high street, retail park, and online sites. Although the company has been gradually closing loss-making stores to improve efficiency (26 closures in the last fiscal year), management hoped to stabilize or improve financial performance through additional measures such as remodeling stores and supermarkets.
However, dramatic increases in wage and tax costs appear to have accelerated the shutdown process. While no specific number of additional closures has been disclosed, the business is apparently taking a defensive stance in the face of economic headwinds.
Analysts are divided on the reasons for this series of budget shutdowns. Others question that logic, noting that shoes are often considered a discretionary purchase. However, others point to Shoe Zone’s history of shrewd cost management and store turnaround efforts, suggesting that the retailer simply takes a conservative approach to the economy, refusing to support loss-making branches in uncertain times.
Zeus Capital, for one, acknowledged the strength of the group, citing strong fundamentals: no financial debt and a history of returning dividends when trading conditions are favorable. While investors may find little comfort in the near-term turmoil, Shoe Zone’s quick and decisive response to changing economic pressures may ultimately serve its long-term interests.
