SO how much did you spend over Christmas?

Not much, according to some high street retailers; buckets, say others. The festive trading period can be make-orbreak time for all retailers.

If it goes well, the company is set up for the year; if business is slow, there is some serious catching up to do during a time where there are less shoppers to pour cash into the coffers.

This year, interest in the post-festive season trading updates has been magnified as industry analysts watch like hawks for signs that we are spending less as a possible symptom of the credit crunch' causing belt-tightening on a wide scale.

The importance of this lies in the fact that one of the main drivers of economic growth in recent years has been robust consumer spending. With household interest payments generally higher now than at any time in the past four-and-ahalf years, people are spending less.

The problem is being exacerbated by the credit crunch' which is decreasing the availability of credit, whilst making it more expensive for those fortunate enough to get it.

Poor festive trading will be made even worse if the less busy periods throughout the rest of the year are characterised by an everdecreasing amount of shoppers.

There will be many of us waiting in eager anticipation of some generous interest rate cuts from the Bank of England over the coming months, to alleviate the pressure on our finances.

High street stalwart Woolworths looks to have had a poor time of it over Christmas and New Year. The company recently reported profits for the 49 weeks up to January 12 down on the same period last year by just over three per cent.

So how did the rest of our best known retailers do? So far, negative statements have come from Next, Marks & Spencer, DSG International (owner of Currys and PC World), Burberry and SCS. Argos and Homebase owner Home Retail Group, whilst reporting disappointing trading for the end of last year, stated a slowdown in consumer spending as more evident'.

Contrast this, however, with the once suffering HMV. Last Thursday the company released its best Christmas figures since it floated in 2002.

Its chief executive, when asked about the possibility that consumer spending is slowing, said: ...at this point...we're not seeing it.' Associated British Foods, owner of Primark, was another whose report was better-thanexpected.

John Lewis too saw sales rise and William Morrison supermarket is expected to be the Christmas champion in the grocery sector when it reports next week.

If there is to be less money spent in our shops, and there is no firm evidence as yet that that is the case, the rational person may think the obvious choice is to avoid investing in retailers at present.

But before hitting the panic button, there is one medium of retailing which definitely grew over Christmas. A record £15.2bn was spent over the Internet between October and December.

Last month alone the figure was 50 per cent more than in 2006. The lure of avoiding the crowds, saving time, and often money is obviously progressing higher and higher up the average shoppers list of priorities.

Maybe, then, how a store attracts your cash is in part contingent on a company's willingness to climb aboard the online shopping bandwagon.

Whether you part with that cash could well depend on the Bank of England.

* Nick Williams is an investment manager in the Teesside office of Wise Speke, and can be contacted on 0845- 213140. Views expressed are the author's own and are not necessarily held throughout the Brewin Dolphin Group.

Past performance is not a guide to future performance. The values of investments can fall and you may receive less than your original investment. Wise Speke is a division of Brewin Dolphin Securities Ltd, a member of the London Stock Exchange, authorised and regulated by the Financial Services Authority.