While the uncertain economic climate has reined in consumers, they are also becoming selective. Current trading is very mixed. Storehouse, the BhS and Mothercare group, and Marks & Spencer announced lacklustre sales and sharp falls in profits last week. By contrast, Next, Oasis and French Connection reported strong growth.
Nobody is taking anything for granted. Selfridges, the Oxford Street store, reported sales had risen by 12 per cent but warned: "The retail environment continues to be very competitive."
Economic statistics are mixed. After poor surveys from the CBI and the British Retail Consortium, the Office for National Statistics revealed last week that retail sales in April had fallen 0.5 per cent against March due to declining food sales. Non-food sales grew by 3 per cent. But a survey from GfK, the pollsters, showed consumer confidence at an all-time high.
"Essentially, you've got very slow overall sales growth. Clearly, retailers are battling to obtain growth in a slow market and this is sorting the sheep from the goats," says Paul Mortimer-Lee, an economist at Paribas.
There is pressure on prices everywhere and wide variations between individual sectors and retailers. This looks to be the pattern for some time to come.
"Under the Monetary Policy Committee of the Bank of England, this is the nearest thing to a boom you can expect. We are not going to see a return to the 1980s," says Adam Cole, an economist at HSBC.
The CBI says footwear and leather goods retailers, specialist food shops and off-licences are enjoying growth while non-internet booksellers, confectioners and furniture and carpet stores are depressed. The late 1980s boom suggested all UK retailers were of the same high quality. Today, it is clear this is not the case.
"Look at the host of once-great names that have fallen by the wayside, such as Sears, MFI and Laura Ashley. There is a real difference between Storehouse, widely identified as a busted flush, and Dixons or Kingfisher," says a WestLB Panmure Gordon analyst, Philip Dorgan.
Even within the household goods sector, widely viewed as depressed, there are marked variations. Allied Carpets has seen its first-half sales fall. Meanwhile Berisford, the owner of Magnet, is experiencing growth, along with Rosebys, which sells soft furnishings, and SCS Upholstery.
The stock market remains confident that last year's interest rate cuts will feed through into increased spending this autumn. Average earnings are rising significantly faster than retail prices. So shares have been marked up since January, with the market picking winners and losers.
Retailers of durables, such as carpets and electrical goods, and effective fashion retailers, such as Arcadia and Debenhams, have soared. Boots, which is less likely to benefit from an upturn, has lagged.
The mass-market fashion sector has been strongly affected by the debacle at Marks & Spencer. Last year, M&S tried to sell unfashionable goods at high prices. Its vast stocks had to be discounted at Christmas, hitting its leading competitors. A repeat this year would clearly hurt the sector. Peter Salsbury, M&S chief executive, is promising rapid improvements, but few analysts expect to see an immediate return to success.
Storehouse's dire results were unveiled last week with yet another restructuring programme - 390 job losses and the closure of a fifth of the Mothercare chain - combined with investment in enlarging some stores. Keith Edelman, chief executive, blamed a tough and volatile clothing market. He agrees the investment programme and the difficult market will depress this year's performance too, but predicts: "Our restructuring will definitely help. Where we have refurbished stores, we've seen sales move ahead."
As summer gets under way, all clothes retailers are hoping they can avoid heavy discounting. Not everyone is optimistic. Mr Dorgan says: "There is little scope for growth. The UK retail sector is full of poorly managed businesses which serve the customer badly."
Some retailers are fighting back. Both Next and Oasis are recovering from disastrous merchandise decisions last year. Next has returned to its basic offering of classic clothes at reasonable prices, with sales 20 per cent up this year. Debenhams, too, is thriving. "Debenhams has tapped into what people want, allowing them to buy into a life-style at a price they can afford," says Mr Cockrell.
The shares of French Connection have nearly doubled, reflecting the success of its FCUK brand and its striking ad campaign. "We are a design- led business, all about product. We've got the product right reasonably consistently," says Nick Mather, finance director.
Internet retailing has yet to affect the high street. But the stock market has already decided that Dixons and WH Smith are winners with their free internet services. But the economics of successful e-commerce remain sketchy. Some observers fear online sales of electrical goods will inevitably cut sales - and profits - in Dixons stores. The electrical goods market isn't exciting. Prices continue to fall and Dixons needs to see sales of the new digital television sets take off. BSkyB's decision to offer set-top digital boxes free has been a blow, but heavy advertising should create demand for wide-screen TVs.
Estimates of the net's impact on retailing vary. Richard Perks, of the Corporate Intelligence Data consultancy, believes low access speeds will slow take-up of online home shopping significantly. But around 2 per cent of retail sales in North America are already net-based and 14 per cent of British homes now have access to the net. So effective retailers can expand into the UK market without investing in bricks and mortar. Gap is to launch a UK website. Catalogue retailers, such as GUS or the German giant Otto, ought to be able to offer high-quality home delivery. Tesco, Sainsbury's and Asda clearly think the net will have a significant impact. They're creating efficient digital shopping services in metropolitan areas, catering for two-wage families with little or no time for food shopping.
Food retailing remains a sluggish, saturated market where Tesco gains market share at the expense of rivals, notably Sainsbury's. The proposed Asda-Kingfisher merger clearly states that size and scale matter in retailing - as Wal-Mart and Tesco show. Smaller groups, such as the Co-op, struggle to match the buying power of large chains. In this climate, further retail failures look inevitable.