What will Christmas be like for retailers? The range of possibilities looks unattractive. No doubt “Ratty” (he of “the worst in 25 years” fame) will don his black-edged toga and see the high street foaming with much blood. But we may also see a few optimists around – you know, the kindred spirits of the analysts who issued buy notes on Northern Rock all the way down. Either way, the prediction game is now in full swing, so here are my thoughts, for what they’re worth.

There are certain outcomes that seem highly probable, if not odds-on. First, thanks to the looming increases in monthly repayments for fixed-rate mortgage holders, more people will feel worse off than last year.

Second, for this reason, whatever surge in sales materialises, it will come late. Last year, in relatively benign conditions, everything happened in the last two weeks. Until then, it looked as though Ratty would be vindicated. This year, the real action might come even later – which promises a particular challenge for retailers’ supply chain skills.

Third, whatever the outcome in terms of like-for-like sales growth, it seems probable that the supermarkets will do relatively well. This has certainly been the pattern in recent years. In 2005 – which may turn out to be a better guideline than 2006 – most of the 2.5 per cent like-for-like growth that the BRC reported for December was attributable to the grocers. Grocery was also the next best-performing sector last year.

Fourth, it’s a racing certainty that internet shopping will have its best Christmas yet. Low prices, time saving, convenience, choice and easy comparisons are driving the growth of internet shopping, all of which are particularly appealing in the run-up to Christmas. Food shopping will remain anchored in food stores and specialist shops, but there’s virtually no other category where the internet isn’t increasing its penetration.

And what are the unknowns that could make things better or worse? Will there be an interest rate cut and, if so, will it be enough and happen fast enough to make a difference to consumer confidence and spending? If things get tough, will someone’s nerve snap and trigger an outbreak of discounting as in 2004? Since then, everyone has been more disciplined, but who knows this time around? Lastly, will the weather be benign or hostile to high street shopping?

The most difficult questions are about consumer psychology and, specifically, how the swing shoppers, who make the difference between a reasonable Christmas and a disaster, will feel about their finances come December.

We won’t know the answer until we see what happens, which is what makes Christmas the biggest white-knuckle ride of the lot for retailers. As Bob Hope once observed: “Last week, I missed a spectacular hole-in-one by only five strokes.”