2008 has been a year to remember – for all the wrong reasons.

The downturn has turned out to be sharper and more deeply destructive than anyone expected. Almost every norm we took for granted in the world of finance has gone out the window.

For retailers the impact has been profound. Everyone has been hit by the collapse in consumer confidence, which accelerated exponentially in the final quarter of the year.

For many the picture has been worsened by the new order in banking and the collapse of discredited models of financial engineering.

A correction was overdue and inevitable. Many people in retail today have never lived through a recession before and the benign conditions of the past decade meant many businesses found themselves ill-equipped to deal with tougher times. Discounting and cost control have been the response. Many people in retail have found themselves out of jobs and more will next year.

That’s because 2009 will be more of the same. Retailers can’t change the world and so the winners will be those that adapt. Being in the right niche – the youth or hard discount market, for example – helps, but offering value in its broadest sense is non-negotiable.

The list of retail casualties will grow. While each business collapse is a tragedy for those involved, the failures have all been companies that have not moved with the times. We have too many retailers and too many stores – particularly given the shift of shoppers to online.

What we have seen this year has been brutal and bloody, but is only the beginning of a fundamental shift that isn’t going to be simply reversed when times get better.

If this sounds sensationalist or unduly pessimistic, it’s not meant to be. It’s not going to be fun but the best retailers will gain market share, continue to innovate and run the very tightest of ships. And then, when things finally do get better, they will emerge stronger and leaner.

We know this is your busiest time of year, so Retail Week will be publishing online right through the Christmas and new year period and we’ll be back in print with all the news from the festive season on January 9. In the meantime, from all the team here at Retail Week we wish our readers and their families a happy and peaceful Christmas.

tim.danaher@retail-week.com

Visit retail-week.com/blog today to read Tim’s blog Retail Day