Retail therapy could cheer up the boardrooms

Despite the threat and imposition of higher interest rates, the retail sector has made some decent gains in the past three months. The exception has been Woolworths, which has struggled with reinventing itself since its demerger from Kingfisher and MFI. It posted a profits warning with its recent results on Thursday, sending the share price south by 16 per cent, until which it was a great favourite with retail investors.

In the 18 months since November 2002, the retail sector has outperformed the FTSE by 25 per cent. However, there are worries in the high street that shoppers have not been indulging themselves in retail therapy. It is even rumoured that Philip Green has been concerned about losing market share with his Bhs, Topshop and Dorothy Perkins brands to the likes of Asda, which has triggered a massive advertising and marketing rethink by the king of 'Gowns & Blouses'.

TV advertising is like insurance - a necessary evil. Marks & Spencer are easy to knock. Poor Stuart Rose certainly inherited a 'hospital ball'. The autumn fashion store layouts at M&S look very unappetising in comparison to the likes of H&M. And there is quite strong evidence of house prices dipping and consumer borrowing and retail spending abating.

There has been no wealth creation in seven years, apart from property values. If owners see their value decline, it is hardly surprising that they pull their horns in, in terms of buying clothes and household goods.

Parliament returns in earnest in October. It is easy to visualise the Prime Minister and Mr Brown extolling the virtues of the Government's initiatives to stimulate the econ omy. Should we believe them? There are certainly signs of anxiety over growth in the US and Alan Greenspan was less than convincing with his testimony to the Senate Budget Committee. Could his comments influence sentiment in Blighty?