Shoe Zone store closures: stores and UK locations closing amid rising costs and weak consumer confidence

• Shoe Zone has closing stores due to rising wage costs and challenging trading conditions
• The retailer says the Chancellor's Budget measures, including higher national insurance, are key factors in increased costs
• The company is accelerating plans to revamp its store network in response to the rising costs

A popular footwear retailer has announced that it has closed stores in response to rising wage costs following recent Budget measures, while issuing another profit warning.

Shoezone, which employs approximately 2,250 people across 297 UK stores, said that the Chancellor’s decision to raise employers' national insurance contributions and increase the minimum wage has resulted in "significant additional costs."

“These additional costs have resulted in the planned closure of a number of stores that have now become unviable,” it said.

Shoe Zone said it had seen “very challenging trading conditions” since the end of September as shoppers have pulled back spending amid unseasonal weather, adding that consumer confidence had weakened further since the Budget in October.

The additional costs resulting from the Budget announcements are reportedly speeding up the company’s existing plans to revamp its store network. Here is everything you need to know...

Which stores are affected?

Shoezone has declined to comment on the number of workers the latest closures will have affected. It also did not provide a list of locations that have been closed when requested.

However, Anthony Smith, Chief Executive of Shoezone, did confirm that “20 stores that have now become unviable” have been shuttered.

“Shoezone has experienced very challenging trading conditions, principally a weakening of consumer confidence and unseasonal weather, both of which have decreased revenue and profit,” he said.

“We are very grateful to our teams in these stores for their continued dedication and hard work over the years and are doing all we can to support them. We remain committed to serving customers via our extensive store network and online.”

The group has already been closing loss-making stores over the past year, revealing in October that 26 sites had been shut on a net basis – 53 closed, less 27 opened – in the year to 28 September.

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Why is Shoe Zone struggling?

Shoe Zone has placed the majority of the blame for its recent misfortunes on the Chancellor’s move to increase employers’ national insurance contributions and increase the minimum wage, which it said has led to “significant additional costs”.

Smith added: “Consumer confidence has weakened further following the Government's budget in October 2024. The Company will incur significant additional costs due to the increases in National Insurance and the National Living Wage.”

But not everyone is convinced, with Russ Mould, investment director at AJ Bell, questioning the group’s claims over the Budget hit.

He said: “Putting the blame for a major profit warning on the Budget seems a poor fit.” He added that the demand for footwear should remain resilient regardless of weather, given that it is not a discretionary product.

“Perhaps Shoe Zone’s offering isn’t resonating with shoppers as much as it used to. At the very least, you would hope management is looking at what’s gone wrong rather than attributing everything to external factors.”

What do you think about Shoe Zone's decision to close stores? Do you agree with the company's reasons for struggling, or are other factors are at play? Share your thoughts in the comments section.