http://www.teletext.co.uk/personalfinance/hunter/default.aspxen-gbMon, 13 Jul 2009 11:27:26 GMThttp://www.teletext.co.uk/images/Logo64x64.gifhttp://www.teletext.co.ukThe casualties continue on the high street as Coffee Republic joins the likes of MFI and Woolworths in finally throwing in the towel.<img src="http://feeds.feedburner.com/~r/news/finance/hunter/~4/UveOqDMtimI" height="1" width="1"/>
Earnings outlooks from most retailers continue to be very cautious, with some firms unable to provide an estimate of trading conditions ahead.

Investors may have seen this reported along the lines of a "lack of guidance due to poor visibility of earnings".

For some considerable time, life on the high street has been about the survival of the fittest.

There remain several obstacles to survival, particularly for the more niche providers.

Retail parks threaten the traditional high street, the stronger names have developed an online presence, and the current economic environment has pushed consumers towards value products.

The Interactive Media in Retail Group is the trade body representing online retailers, or "e-tailers".

It says the top five visited e-tailer sites between February and April were Amazon, Argos, Play, Tesco and M&S.

Growth in online sales may have been lower than initially thought - the latest estimates are it will represent 10% of retail spending by 2013.

But, it is becoming an important component of a retailer's armoury.

Retailers are described as early cyclical stocks, due to the theory that retail begins to outperform as economic conditions improve, largely through the increase in disposable income.

Some US economists have pointed to an increase in the US consumer's disposable income due to the sharp reduction in the oil price, which is feeding through to petrol prices.

They have also suggested the reduction in the price of farm (and therefore food) products has helped.

The main factor holding the consumer back at the moment, they argue, is simply one of confidence.

In the UK meanwhile, the resilience of the consumer has continued to surprise many analysts.

Over the last six months, as the market continues to debate when an economic recovery may begin to take hold, most of the retailers have seen shares rise, albeit in some cases from a low base.

Asos, for example, has risen 28%, Next has gained 77%, Kingfisher 85% and Argos-owner Home Retail has added 31%.

The overall outlook for the retailers is relatively subdued given the ongoing debate into any recovery.

A selection of market views is as follows - Asos (strong buy), Debenhams, Tesco (buy), Next, Kingfisher, Marks & Spencer and Home Retail (hold).

This does however, on average, signal a fractionally more positive overall view on the retail sector than that of a few months ago.

It would appear that the market has decided life on the high street will continue to remain difficult as consumer confidence remains checked.

However, there are bargains to be had if the investor is prepared to look hard enough.

Richard Hunter is head of UK equities at Hargreaves Lansdown. Send your views and feedback to fintalk@teletext.co.uk or text 07624 809882.

Hargreaves Lansdown

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