Shoe Zone has warned it will plunge back into the red after a bruising year of falling sales, subdued consumer spending and rising costs, as the budget footwear retailer faces mounting pressure to revive its high street business.
Shares in the group fell by as much as 22 per cent after it reported a 4.5 per cent decline in revenue to £142.4 million for the 53 weeks to October 3. The company now expects an underlying full-year loss of about £1 million, compared with a £2.4 million profit the previous year.
The warning underscores the challenges facing Britain’s retailers as cash-strapped shoppers rein in discretionary spending and businesses contend with higher operating costs. Shoe Zone said its autumn and winter trading had been weaker than expected, dragging on the final weeks of its financial year and continuing into the first quarter of the new period.
Store closures have also weighed on revenue. The chain ended the year with 251 shops, down from 269 in October 2025, as it continues to reshape its estate. The company aims to complete a programme of relocating and upgrading stores by the end of 2027. Its portfolio now includes 211 larger-format outlets and 40 traditional high street shops.
Chairman Charles Smith said consumer confidence had remained weak and deteriorated further after the Government’s November 2025 Budget, while persistent inflation, elevated interest rates and squeezed disposable incomes had contributed to negative sentiment.
Sales improved when shoppers had a clear reason to spend, including during the warm summer and back-to-school season, he said. But overall discretionary spending remained subdued as consumers exercised greater caution.
Shoe Zone also warned that the conflict involving Iran had pushed up fuel and transport costs, while container prices and a weaker pound against the dollar threatened to add further pressure.
The company said it was monitoring the economic and geopolitical environment closely ahead of the Government’s October 2026 Budget, warning that rising shipping and fuel costs could weigh on future trading.
The outlook leaves Shoe Zone facing a difficult balancing act; modernising its store estate while navigating cautious shoppers and a fresh wave of cost inflation.
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