Shoe Zone shares plummet as retailer kicks out at budget tax raids
Shoe Zone shares plummeted after the retailer hit out at Rachel Reeves’ budgets for stifling consumer confidence, saying the chancellor’s policy and the Iran war will kick it into a loss this year.
The firm’s share price slumped by more than 32 per cent on Wednesday’s market open, leaving the stock down more than 48 per cent this year at 35p.
The London-listed retailer said it will tumble to a loss of between £1m and £2m. It previously expected a pre-tax profit of £1m.
It blamed the chancellor, claiming her two Budgets have directly resulted in a hit to the firm’s revenue.
The AIM-listed firm said it has faced “challenging trading conditions” because of plummeting consumer confidence, caused by the government’s last two budgets and the war in the Middle East.
Shoe Zone: Reeves caused consumer gloom
“These macroeconomic factors have increased customer caution, leading to lower footfall, less discretionary spend and additional costs such as container prices and transportation costs, with a resultant reduction in revenue and profit,” Shoe Zone said.
Consumer confidence suffered its biggest drop in four years at the start of this year, as Brits cited deepening fears around their spending power and job security.
Worries that the conflict will spike inflation are causing shoppers to cut back, with consumer spending on non-essential items falling by 6.7 per cent compared to the end of last year.
The Iran war and the subsequent blockage of the Strait of Hormuz has sent energy and supply chain costs soaring for many businesses.
Shoe Zone has seen its share price tumble since the middle of 2024, off the back of a number of profit downgrades in which the firm also took aim at the Labour government.
The footwear retailer saw pre-tax profit tumble from £10m to £3m last year, as it blamed the 2024 October Budget for tanking consumer confidence.
Retailer forecast slim profit but set for loss
“Persistent inflation, higher interest rates, and reduced disposable income contributed to negative economic and consumer sentiment in the UK,” the firm said in January.
Shoe Zone said it expected this year to deliver yet more “challenging” trading conditions, citing hikes to the living wage as it forecast profit to dip further to £1m.
The retailer ended its last financial year with 269 stores after closing 39 sites, and saw revenue dip eight per cent to £149m.
Shoe Zone was founded in 1917 and is headquartered in Leicester, and sells around 16m pairs of footwear every year.