So 2012 opens up before us and, if we’re to believe the Mayans, we could be witnessing the last set of post-Christmas retail figures this side of the Apocalypse.

So 2012 opens up before us and, if we’re to believe the Mayans, we could be witnessing the last set of post-Christmas retail figures this side of the Apocalypse.

At the time of writing, we’re seeing some fairly respectable numbers so far, but with the demise of at least three high street names and fears over many others, I don’t think we should be booking any marching bands just yet.

Even without the end of the world beckoning us, the predictions for retail this year suggest that an apt name for the next shopping development would be Armageddon and a quote from Dante above the door might be somewhat optimistic. 

Certainly expectations of genuine like-for-like increases for the foreseeable future are being downplayed, which is why I was surprised to read that there are apparently still potential investors, awash with cash, itching to buy into retail.

As a humble shopkeeper, who lives and dies on positive cash flow, I’m frequently left open-mouthed at the staggering level of debt that churns about some quarters of our industry.

I know the old adage of ‘speculate to accumulate’ but in some cases this seems to be more akin to a belief in alchemy.

Developers, already leveraged to the nostrils, build new projects on the back of huge investment capital. Space is then let to retailers, many of which are themselves hostages to injected equity. 

It seems that as long as the ball stays in play and no one blows the final whistle, day-to-day profitability is regarded a quaint anachronism. Doesn’t this all sound frighteningly familiar?

As we’re led to believe that the financial markets could crash and burn at any minute, I wonder how many of these paper tigers would survive the flames. 

Could we perhaps even start to see some of the more overcommitted developers themselves running into difficulty? Especially if 2012 sees a continuation of online expansion in preference to bricks and mortar.

Admittedly it seems an unlikely scenario at the moment, but then again, it may just depend on which calendar you’re following this year.

  • Ian Middleton, Managing director and co-founder, Argenteus