Shoe Zone has halved its profit guidance in the face of weaker consumer spending, partly blaming the impact of the Labour Government’s budget tax hikes.
The high street chain said it was knocked back by “challenging trading conditions” in both June and July.
It told shareholders that is saw a further drop in consumer confidence “following on from the Government’s October 2024 budget announcement”.
Shoe Zone bosses said they saw weaker “discretionary spending” and decreased footfall in stores due to the impact of inflation, interest rates and higher savings rates.
The Leicester-based retail chain said this has a caused a “resultant reduction in revenue and profit”.
It therefore said in a statement to the stock market that it is on track for an adjusted pre-tax profit of around £2.5 million for the year to September 27.
The company had previously forecast a profit of £5 million for the year.
Shoe Zone said it will also withdraw its previous plans for paying out dividends due to the weaker performance.
The company said: “Management remain confident with the underlying strategy, with the 200th new format store opening this month.
“The company remains debt free and confident in our cash management, with cash levels currently higher than the same period last year.”
Shoe Zone runs 271 stores across the UK and has around 2,150 employees.
Shares tumbled by around 20% in early trading on Wednesday.