The middle ground used to be where no retailer wanted to be - now it’s looking like a safe haven

There’s been a huge amount written and broadcast over the past week about the problems facing the UK high street, and there’s no doubt that retailers are facing hugely challenging trading conditions at present. But a sense of perspective is vital. All those retailers which have gone under are those which would have been expected to, while others are doing a good job of riding out the downturn.

Debenhams is one retailer which might have been expected to find the going tough. But its trading update at the end of last week revealed robust sales and improving trends in trading. Debs benefits from one of the most experienced management teams in the business and has been engineering its product mix to improve margin whilst also maintaining shopper footfall. It’s a strategy which seems to be working.

But I don’t think it’s all about self-help. Debenhams is often bracketed with Marks & Spencer and Next in the mass market end of the middle market, and right now that’s not looking like a bad place to be. It seems the squeeze on living standards which is hitting retail so hard is being felt most at the value end of the market, where retailers such as TJ Hughes, Life & Style and Jane Norman operated, while those slightly higher up the chain are doing OK.

That shouldn’t come as a surprise. After all, while rises in petrol prices, domestic energy bills and food prices hit everyone, but the least well-off are disproportionately affected. This can help the ultra-cheap food discounters - everyone has to eat - and there is growing evidence that Aldi and Lidl are taking share from Asda.

But in the largely discretionary fashion and home markets, the signs are shoppers are increasingly reluctant to spend. And when those people do spend, they’re going for quality, which means saving up to go to M&S, Next or Debenhams rather than more frequent trips to value stores.