The good news just keeps coming. A week that began with the pre-pack administrations and sales of Jack Wills, Coast and Karen Millen ended with the news the economy contracted 0.2% between April and June.

The tough conditions confronting retailers show no sign of easing. On the contrary, they may get worse. The spectre of a no-deal Brexit looms large at Halloween, just as the traditional golden quarter gets underway.

Over the past few days, food retailers have been fixtures in TV and radio studios in an attempt to highlight the urgency of the threat to food supply in the event of a disorderly departure from the EU.

“Retailers had a dress rehearsal for Brexit, an expensive one, when they prepared for crashing out in March”

Former Sainsbury’s chief executive Justin King, now a non-executive director of Marks & Spencer, warned in a BBC interview that “anything other than silky smooth at our borders on October 31 will have a significant impact on food availability”.

He told Newsnight: “There’s about 10 days [worth] of food in the UK, in total… the kind of disruption that the government is talking about will lead to gaps on the shelves within a week – significant gaps.”

A couple of days later, Iceland managing director Richard Walker, who voted to leave the EU in June 2016, was flagging his concerns about tariffs on Danish bacon on the Today programme.

Crisis management

Much of retailers’ Christmas buying has of course been done. The big unknown is the extent to which shoppers will open their purses and clear the shelves amid economic and political uncertainty.

Will they, as often in the past, remain determined to enjoy a good Christmas with friends and family with all the traditional accompaniments? Will they draw the curtains on a scary world and hide their cash under the bed? Or will definitive action, such as a no-deal exit, bring relief that finally – for good or ill – there has been action.

“If confidence is wobbly inside a business then you can be pretty certain shoppers won’t be confident in that business either”

If no deal brings any immediate shocks such as a fall in sterling, a rise in job losses, conspicuous gaps on grocers’ shelves or a recession – a possibility after this week’s economic contraction – consumers may be reluctant to spend.

In 2008, as the financial crisis hit, trading in the aftermath of Lehman Brothers’ collapse resulted in the worst December trading ever recorded by the BRC-KPMG Sales Monitor. It was “truly dreadful”, in the words of the trade body’s then boss Stephen Robertson. His successor, Helen Dickinson, then head of retail at KPMG, pointed out that discounting had risen to “unprecedented levels” and said that the dire performance was “a testament to the severity of the shift in the mentality of the consumer”.

There is perhaps one perverse upside, though. Retailers had a dress rehearsal for Brexit, an expensive one, when they prepared for crashing out in March.

Raising morale

The gruelling Christmas experience in 2008 and all the upsets in the intervening years – 2019 has already brought the worst June and July BRC sales figures ever – mean retailers have become ever more experienced in navigating torrid conditions.

Small comfort, admittedly, but they can – and must – apply hard-learned lessons that can enable them to survive and thrive. That will involve being as efficient as possible – this week also sadly brought the announcement of 4,500 job cuts at Tesco – but will ultimately depend on engaging the customer as much a possible whether through great value, quality or service.

There will likely be a need for tonic for the troops. Retailers cannot afford to enter this period of uncertainty with morale low at head office and on the shop floor – that’s the oil without which the engine will seize up.

If confidence is wobbly inside a business, reflected for instance in failure to back winning product sufficiently or in ‘there’s nothing we can do’ attitudes, then you can be pretty certain shoppers won’t be confident in that business either. There needs to be confidence in overall strategic direction, and confidence in tactics from discounting to marketing.

Retailers must hope and prepare for the best. If they don’t, there’s no chance of achieving it. But they must be ready to respond to the worst to stop the Grinch, Brexit or anything else stealing Christmas.