As the realities of both the severity and the length of the uncomfortable squeeze on real incomes and retail sales become more evident, Mary Portas and David Cameron look increasingly like the leading players in a Murdoch-directed horror movie: we can only hope that it doesn’t become a disaster movie.

As the realities of both the severity and the length of the uncomfortable squeeze on real incomes and retail sales become more evident, Mary Portas and David Cameron look increasingly like the leading players in a Murdoch-directed horror movie: we can only hope that it doesn’t become a disaster movie.

In this challenging situation, the real long-term winners will be those retailers that make the correct strategic decisions and fundamentally reshape their operations to take maximum advantage when the next upturn materialises.

The rebalancing of the economy allied to the multichannel explosion has to be viewed as a positive opportunity rather than a threat.

While the property world largely remains in denial, and is seemingly acting like King Canute with regard to future rental levels, I am encouraged by the number of retailers that are now not only thinking, but actively taking the necessary steps to play the new game successively and profitably.

I would highlight developments such as dual branded shops: Aurora operates a Warehouse store above an Oasis in Cheltenham, while Philip Green is well advanced with his Bhs/Arcadia integration.

Mothercare, which could have been much more seriously hurt by the Early Learning acquisition, will cut costs by £18m, adding £4m or £5m to profits by 2013 through a reduction in UK store numbers from 373 to 266.

House of Fraser is considering opening small 1,500 sq ft click-and-collect stores, and Asos is considering Boots where Mothercare already sells a selected range in 380 stores.

I could go on but instead suggest that conclusive proof that the retail world has changed forever is provided by Carpetright where Lord Harris – a traditional retailer who loves opening stores and is probably the cleverest property market investor – is now closing stores.

It is in this context that I am bemused by the ongoing space race which is still in full flow in the food retailing sector. Around 70%of all the new space being added in the UK today is accounted for by the food retailers.

Should one conclude that they do not believe that home shopping will take off or be profitable in the context of grocery? Above all, it is Tesco UK that worries me – it is the dominant player, yet like Marks & Spencer in the 1990s it appears to have lost its way.

As a consumer I see its competitive edge blunted. What is it first choice for? On price it’s still Asda, while even Waitrose claims to price-match across a wide range.

On quality and speciality foods it is a poor ‘also ran’. In clothing the winner is, surprisingly, Sainsbury’s – in terms of volume now, the 10th largest UK fashion retailer and the seventh largest in kidswear.

Big equals bland seems to be the hole Tesco UK has fallen down. Thank goodness for overseas – the US excepted of course. I can’t believe that I’m alone in finding the Tesco advertising annoying and well beyond its sell-by date.

  • John Richards, retail consultant