Shoe Zone profits given a kicking as shoppers shun the high-street
It was hit by 'challenging trading conditions' in June and July, due to 'a further weakening in consumer confidence'.
It blamed the October Budget for depressing consumers' appetite, citing 'the continued impact of inflation, interest rates and higher savings rates'.
This led to a fall in revenue and profit, meaning it is now on track for profits of around £2.5million for the year to September 27.
The chain had previously forecast a profit of £5million, and will now withdraw its plans for paying dividends due to the weaker performance.
The group has 271 UK stores and around 2,150 employees.
Shoe Zone shares fell 17.7 per cent, or 15p, to 70p.
The London-listed group, which sells shoes from town centre and retail park stores, as well as online, told investors it had experienced 'challenging tradition conditions' over June and July.
It blamed a 'further weakening in consumer confidence' in early summer on changes announced in last year's Autumn Budget.
The downgrade follows a profit warning in December and a disappointing first-half performance posted in May, which have driven Shoe Zone shares more than 50 per cent lower over the last 12 months.
Weaker discretionary spending was also attributed to the 'continued impact of inflation, interest rates and higher savings rates', which Shoe Zone led to a drop in footfall.
The comments compare to the closely-watched GFK Consumer Confidence index, which fell from -18 to -18 in July, compared with an average of around -11 since 1981.
But figures from the British Retail Consortium show total retail sales rose 2.5 per cent year-on-year last month thanks to a sunny weather boost.
Shoe Zone said on Wednesday: '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.'
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