In every report on TV and in every newspaper you read, we are repeatedly faced with the prospect of a bleak financial future. As unemployment and rising inflation force us to dig a little deeper into our pockets, will Christmas shoppers be compelled to reduce spending, and if so, how will retailers cope with the decline in Christmas sales?

These are the questions I put to a number of different retailers in Southampton’s city centre, in an attempt to discover first hand how hard the credit crunch really has hit home. The last ten weeks of the year account for more than half of many retailers’ annual profits, and with many families tipped to spend much less on food and presents this year, it seems clear that sales are bound to suffer. Whilst many insisted that sales have not at all been affected by the credit crunch, others admitted that trade is already suffering. Marks and Spencer acknowledged that whilst weekend sales have remained substantial, weekdays have experienced a decline in profits, and consequently they have been compelled to cut back on certain expenses, such as store renovations. They also revealed that more people are starting to pay by cash, perhaps because lenders are now beginning to reject credit card applications and reduce debt limits, making it harder for people to obtain credit in the run up to Christmas. Not everywhere is suffering however. New Look maintained that sales have not as yet been affected by the credit crunch, and that although November has so far been quieter than usual, they expect substantial profits in the busy last two weeks running up to Christmas. Primark, also, insisted that the credit crunch has so far not influenced income.

Nevertheless, many retailers have already introduced price cuts of up to 70%, and are offering big savings and discount vouchers to encourage shoppers to spend their money. As spending is predicted to rise only 2% this year, supermarkets are ordering in less stock because they believe it won’t sell, and retailers have started cutting back on expenses such as advertising.

Whilst many higher-priced retailers may suffer financial losses, other traders however, such as discount and value chains, are in fact expected to profit from the credit crunch, as shoppers opt for bargains. Aldi and Peacocks are just two traders who are anticipating an increase in sales, and internet shopping is also expected to experience increasing popularity. In the current insecure climate, cheap and cheerful seems to be the way forward.

Ultimately, everyone is bound to suffer to a certain extent from the affects of the forthcoming recession. Fortunately for us students, we can, for the time being, carry on casually flittering away our student loans, pretending that, somehow, everything is sure to sort itself out in the end (err-hum… Daaaaad…!) However, it is sure to catch up with us in the end. Perhaps this is the time for us all to start routing behind our mouldy sofas in a desperate attempt to recover some dusty pennies, which might help to buy Mum her luxury cashmere scarf.