AS an investment manager and stock market follower, I have been concerned for some time that Government-imposed austerity measures, public spending cuts, rising inflationary pressures, together with January’s rise in VAT, would hit discretionary spending and blow further ill-winds down Britain’s already struggling high streets.

In addition to the increasing pressures on consumer spending, the recent sharp rises in commodity prices have also been squeezing retailers’ profit margins.

Since the turn of the year, many of the UK’s best known retail chains have been finding it very tough.

Wine merchant Oddbins has collapsed into Receivership, music and book seller HMV and sports retailer JJB Sports also appear to be finding it tough.

In recent days, a number of the larger retailers have begun to report their results and despite their more diversified operations and greater financial strength, the trend has been much the same. First out of the blocks was electrical retailer Dixons, who compounded the gloom by issuing a poor trading update. They blamed a sharp slowdown in consumer spending for the 11 per cent slump in same store sales in the UK and Ireland over the past three months. Perhaps more surprising was the lacklustre trading update from “stack em high, sell em cheap” retailer Primark, which issued an equally downbeat trading outlook, commenting the toughest retail conditions since the early 1980’s could persist for some time. The surprise was that Primark has previously been one of market leaders in terms of sales growth in terms of clothing. As I write, flooring specialist Carpetright and Halfords have just issued further profit warnings with spending on carpets, car accessories and mountain bikes down sharply on previous years.

It is not just the nonessential spending retailers which are feeling the pinch.

Fuel price rises have started to eat into profit margins of the supermarket chains as cash strapped shoppers reign in spending on groceries.

J Sainsbury has been hit particularly hard, according to industry data, with the lower cost discounters such as Aldi and Netto the main beneficiaries as consumers appear to be switching to cheaper products While it is undeniable that consumer confidence is at a low ebb and could remain so for some time, and rising commodity prices, particularly cotton, show little signs of easing, the share prices of retailers have adjusted sharply downwards as if the situation will not change. I believe conditions could improve as we move towards the latter part of the year and input cost inflation eases. If my optimism transpires, we may be close to the lowest point in the cycle, the point of maximum pessimism.

Indeed, despite the avalanche of gloomy trading updates, some shafts of sunlight have started to appear. Perhaps the UK’s most famous retailer, Marks & Spencer recently managed to defy the sceptics by reporting better than expected results.

Indeed, the sigh of relief across the stock market was almost audible with the shares jumping nearly eight per cent, despite announcing relatively flat sales in the first three months of the year.

Although womenswear and food sales were down, menswear and lingerie sales were better. I’m not quite sure what to read into that trend.