Shoppingham's countdown to Christmas

What does it mean when profits plunge at retailers like Debenhams and BHS? That panic-stricken shoppers have fled the High Street amid fears of recession?
Not exactly.
First things first. The figures both of these High Street giants have trotted out today are for months past. They don’t reflect what may be happening now.
Nor do falling profits necessarily mean that shoppers are staying away in droves. What they do mean is that both stores are having to cut prices to keep the tills ringing.
This is an important difference. If sales and profits are both down substantially it means something has gone badly wrong: that even low prices aren’t making shoppers bite. A scenario like this would be a clear sign of recession.
But if profits are substantially down and sales are only slightly down it suggests that people may still be willing to shop if the price is right. That’s a clear sign of tight personal finances.
At Debenhams, for example, profits were down 16%. But sales were down only 0.9%. So Debenhams is having to discount to keep the stock shifting off the shelves.
The interesting figure is what has happened since the end of August, when Debenham’s sales fell more than 4%. So what was a gradual decline has clearly accelerated. I think we can safely blame sheer, financial panic for some of that.
At the group which owns BHS, Topshop, Top Man etc, it’s a similar story: profits down 6% but sales down 2.8%.
The key pointer as to where the retail economy is heading will come after Christmas when we find out how all the retailers have done during the crucial festive selling season.
Those figures could quite literally be make or break for some retailers, especially those with banks breathing down their necks. They need the financial panic to go away and shoppers to regain some confidence.
This matters for Nottingham. Shoppers spent more than £1.7 billion in the city’s stores last year and those shops employ thousands. They will be waiting anxiously to see whether, in a grey winter, people decide they are still going to enjoy Christmas.