Shoe Zone is set to record a loss before tax of between £1m and £2m in the current financial year.

The footwear retailer’s warning comes after its initial guidance forecast a £1m profit for the year to 3 October.

The firm said it experienced challenging trading conditions in the first quarter of the calendar year, due to a “continued weakening in consumer confidence” following the Government's last two Budget announcements, as well as the geopolitical issues in the Middle East.

Shoe Zone went on to say these macroeconomic factors have increased customer caution, leading to lower footfall, less discretionary spend and additional costs, such as container prices and transportation costs, which have led to revenue and profit reductions.

This impact is also set to continue into the second half of its financial year.

Following the announcement, shares in the retailer dropped by over 12%, as its share price fell by over 50% in the last 12 months.

Investment director at AJ Bell, Russ Mould, stated: "Shoe Zone has taken a step backward as life becomes harder for the discount retailer. A more cautious consumer, lower footfall to its stores, and extra costs linked to the Middle East crisis has put an end to its dream of making a profit this year.

"For a business that sells essential items at low prices, one might be surprised at the number of setbacks over the years. Its journey has been wobbly, but these challenges have given it plenty of experience at coping with headwinds."

Shoe Zone will publish its interim results in early May.

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