In 10 years of following retail and the City, I can safely say the sector has not been so out of favour with the Square Mile as over the past year or so. Sure, there have been spills – the boom and bust of the dotcom era, economic fears after 9/11, the Christmas jitters that have become as traditional as turkey.

But they have been more than outweighed by the thrills: Wal-Mart’s UK arrival, mega mergers and acquisitions or the private equity feeding frenzy – all of which seemed to show the only way was up for the stores sector.

As shoppers keep a tight hold on their purse strings and gloomy forecasts proliferate – the OECD this week became the latest to point to a UK recession later this year – there is little sign that retailers’ performance will improve soon, or that investor sentiment will change. But retail will outride this downturn, as it has those in the past.

That’s partly a result of the consolidation in the industry over the past decade. A look back at Retail Week’s City prices table of 10 years ago reveals the scale of change. Gone are names listed in their own right such as Electronics Boutique, Wickes, Safeway and Asda. All were swept into the arms of retail suitors, resulting in stronger businesses better able to withstand the economic siege today.

One big difference between this downturn and previous ones, however, is the number of big store groups now in private hands – House of Fraser, Boots and Matalan to name just three that were previously public.

Some private equity-backed businesses may find high street conditions tougher to endure than their quoted counterparts because of high levels of debt being carried and the jittery attitudes of banks. After their failure to manage risk adequately, which precipitated the downturn, some banks are financially challenged themselves and more inclined to cut credit lines or impose punitive refinancing terms.

Another difference this time around is that, like so many retailers, many consumers have never experienced a real economic upset. It’s new and scary and may prompt more belt-tightening than might otherwise have been the case.

But in spite of the dark clouds that loom over the sector, what has been notable is not the volume of retail collapses, but their scarcity. Most of those that have fallen by the wayside were relatively small, weak businesses.

That is not to say there will not be more failures, and perhaps some very high-profile ones. And City attitudes certainly won’t change until trading improves. But the retail industry is resilient enough to emerge largely intact.

George MacDonald is deputy editor of Retail Week

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