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Budget Pain Hammers Shoe Zone Stores to Close


Banking And Finance

Budget, Shoe Zone, Banking & Finance, Closure

Retail profits and jobs are hit as Shoe Zone announces store closures due to increased costs from the UK Budget including higher National Insurance and minimum wage.

High street retailer Shoe Zone announced the closure of its stores, owing to rising costs triggered recently by the budget of the Chancellor of the Exchequer. For the company, these high employer National Insurance contributions together with the rise in minimum wage made "some locations unviable".

In a trading update on Wednesday, Shoe Zone stated that there were "significant additional costs" that had arisen out of the October budget, with new employer National Insurance charges from 13.8% to 15% that will come into effect next April. Further draining the cash from the company, the National Living Wage also saw a 6.7% hike.

The company will be able to name the specific store closures, as well as the locations in which the stores are situated, although they did say that profits cut by half-projected to be £10 million for the 2025 financial year compared to £5 million, down from an initial forecast of £10 million. This bleak forecast is indicative of the dire state of offense of the retail industry, which Shoe Zone blames on the reduced consumer confidence attributed to the Budget.

According to the British Retail Consortium (BRC), the increase in taxes and the rise in wages will result in a combined loss for the retailers of £5 billion in the year 2025, thereby increasing further the cost of doing business in the retail industry. Job losses in part-time retail roles are actually displacing the employees but could be accelerated in this regard with these changes.

Clearly, Shoe Zone recognizes that how policy decisions can change across the Banking & Finance landscape can ripple down and cause similar effects within the retail industry on jobs and business sustainability across the UK.                                                         

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