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Retailer Shoe Zone has hit out at “highly adverse” government policies as it revealed plunging annual profits and warned earnings are set to tumble again due to tough trading. The high street chain saw its shares drop 22% in morning trading on Tuesday after revealing pre-tax profits slumped by more than two-thirds to £3.3 million in the year to September 27, down from £10.1 million the previous year.
It said trading remained under pressure at the start of 2025-26 amid weak consumer confidence and as it blamed Government budget measures for sending costs soaring and weighing on shopper spending. The group is forecasting profits will fall to about £1 million in the year to October – down by 70% year on year.
Chairman Charles Smith said: “Trading conditions remained challenging in the first quarter of the new financial year, with revenue down on forecast, reflecting ongoing macro-economic pressures that continue to weigh on consumer confidence, resulting in lower footfall on the UK high street, alongside the highly adverse Government fiscal policies.
“The Government’s November 2025 budget included an additional increase in the national living wage, raising our cost base further, with broader measures not materially improving consumer sentiment.”
The group has seen its shares sink to its lowest level for five years in recent months as its trading woes have deepened. It saw store sales drop 10.3% to £113.1 million over 2024-25, having ended the year with 28 fewer stores on a net basis, at 269 in total.
It shut 39 shops but opened 11, while also revamping six to its larger format. Mr Smith said Government policy weighed on the previous year, but added other factors also impacted trading.He said: “Persistent inflation, higher interest rates and reduced disposable income contributed to negative economic and consumer sentiment in the UK.
“Sales were good when there was a reason to buy, such as the warm summer and the back-to-school period, however discretionary spending remained subdued as consumers exercised greater caution in what they were spending money on.”
The company was originally incorporated on July 21, 1917, as the Benson Shoe Company. It was a family-run footwear business based in Leicester, founded by the grandfather of the current owners. For over 60 years, it operated under the Bensonshoe name as a regional retailer.
The foundation of the “Shoe Zone” we recognise today began in 1980, when brothers Michael and Christopher Smith bought controlling shares in their grandfather’s company, Bensonshoe. In 1996 the business officially changed its trading name to Discount Shoe Zone and in 2001 the name was shortened to simply Shoe Zone.
