On the surface, today’s numbers look positive. As usual, onlookers will try and take hope from the seemingly encouraging sign that sales volumes are up.

On the surface, today’s numbers look positive. As usual, onlookers will try and take hope from the seemingly encouraging sign that sales volumes are up.

However, lying underneath these figures are the tell-tale signs of the problems facing retailers that, despite appearances, just won’t go away.

A clear example of this is the significant uplift in department store sales volumes. A positive figure, at first glance. But when you see that these increases are driven by promotions and clearance items, the 3% increase looks a little less cheerful.

It’s unlikely there was much margin in those sales. In these cases, it’s always worth repeating the old adage: “sales is vanity, profit is sanity.”

The grim reality is that things are only getting worse. With headline inflation now running at 2.9% and the RPI at 3.3%, consumers are coming under increasing pressure. The Asda monthly income tracker shows that household disposable income continues to fall following hefty price increases in gas, electricity, food, petrol and mortgage interest payments. Meanwhile, the threat of rising interest rates continues to represent the elephant in the room.

Consumers are now heavily focused on multi-buy promotions, discount pricing, clearance bargains and the rock-bottom prices offered online. This puts traditional store-based retailers under huge pressure, with rising rent and wage bills to pay all while trying to compete with online and discount players. The high street is proving the toughest game in town.

That said, many high street players are acting as cannily as ever. Statistics last month from property company CBRE showed that the pipeline of planned new supermarket branch openings has slowed for the first time since the beginning of the credit crunch in 2007.

Large retailers are seeing a declining marginal return on space, and many are now shelving their expansion plans. Growth cannot come from physical space anymore, UK retail has too much of it. Instead, retailers are having to squeeze more out of their existing estates and this means getting creative, in a bid to lure customers away from online offers, out of the discounters, and back into traditional stores.

Just this week, Tesco announced that it will open its first store that combines a Tesco Extra with a garden centre. Already it has added coffee shops, bakeries and a gym to its traditional shops elsewhere in the country.

As times get tougher and consumers become ever more demanding, the best retailers will continue to find new ways of capturing their business, and not just by falling prey to the vanity of sales without margins. After all, isn’t that what retailing has always been about?

Dan Murphy is a managing director at consultancy Alvarez & Marsal