Britain’s second largest retailer remains bullish as profit forecasts exceed expectations.

Debenhams announced yesterday that its yearly pre-tax profit would likely rise by 20m per cent. The increase comes on the back of designer range performance and online sales.

The company predicted that it would hit the £150 million profit mark, with the recent trends of store expansion and discounting helping to fuel coffers by £3 million over what analysts had previously forecast. However, at stores that had been open to the public for at least one year, overall sales were flat compared with the previous 12 months.

Despite the unsteady consumer environment, which has seen the public sector suffer widespread job cuts, material costs rise and austerity measures hinder spending, Debenhams has been able to produce the upbeat estimate which covers the year until 28 August. Deputy chief executive for Debenhams, Michael Sharp, said the store was well placed to cope with what has been a challenging storm. Mr Sharp said the impending VAT rise was an obvious concern for all retailers, but that his company’s commitment to offering the right products at right prices had served them well in times of financial hardship. Mr Sharp also acknowledged that online sales had seen a significant rise, with many customers trending towards the time and money saving alternative.

With 160 stores across Britain and Ireland, Debenhams is the UK’s second largest sales retailer behind John Lewis, and also features stores in Denmark and over 60 franchised outlets overseas.

Leading fashion retailers H&M and Zara will both go live online in September.

From next month, shoppers who are based outside of the London store range will be able to buy their favourite outfits via the internet as the clothing providers attempt to buck the increasingly dour trends hitting the high street.

Zara, which is owned by the Spanish company Inditex, will launch its new website simultaneously across the UK, Spain, France, Portugal and Italy on September 2, and while they have previously offered a range of homewares online, the revamped website will mark the debut of fashion lines that have in the past been only available in-store. H&M will launch its new online venture a fortnight later, offering men’s, women’s and children’s clothing in addition to their own range of homeware.

The current gloom facing that has beset consumer confidence in the UK and across Europe has led several major retailers to warn that widespread cuts in public sector spending will have a knock-on effect for individual customers. The recent austerity budget from Chancellor George Osborne had created increased worry across the UK over employment and wage prospects, leading to a tightening of the purse strings.

Both Marks & Spencer and Next have warned that consumer spending is likely to be constrained in the coming months as the new coalition government’s emergency budget combines with the rise of VAT at the end of the year to keep customers out of high street shops.

UK hoteliers are steeling themselves for a slow economic recovery.

Choice Hotels Europe’s UK division has released a new survey which shows that 36 per cent of UK hotel owners claim the slow the pace of economic recovery could continue for some years.

Choice Hotels, which operates the Comfort, Quality and Clarion brands, questioned managers and owners on priorities for the immediate future and also what they deemed the biggest factor to losing business.

The biggest barrier in preventing the highly valued customer loyalty was found to be the attitude of staff, with 50 per cent of those surveyed sating they felt this was the largest contributor to any negative impact. 18 per cent of hotels have subsequently implemented a range of staff training and customer service initiatives designed at making the customer experience as best as possible. In particular, front of house and Reception staff, along with room cleaners, will need to improve performance to prevent a poor image of a property being reflected on the key arrival time.

31 per cent of respondents said the past six months were the most difficult ever faced, with the trading environment unlike anything seen in the past. The Choice ‘Hotelier Pulse-Check’ survey however did manage to find that around a third of those polled held hopes that the 12 months ahead would show signs of a turnaround in fortunes. The main priority for all hotels in this period is to step up marketing and advertising campaigns to attempt to attract new customers to their properties, with 18 per cent of hotels also investing in new or upgraded facilities.

The slow pace of economic recovery has not appeared to have slowed down spending on fashion.

That is the verdict according to the latest just-style Apparel Industry in 2010 report, which found that fast and value fashion operators will be the most likely businesses to succeed in 2010, leading the way in profit forecasting.

The report  claimed that retailers who offer fashion collections at low prices are in the best position to take advantage of the current consumer climate in the UK, with organisations such as Primark set to  boom thanks to their strategy  of high volumes at low prices.

 The just-style survey also found that in the value fashion sector, where Primark is joined by the likes of New Look, the growth rate was at a high 59 per cent, while respondents also suggested that chains such as Mango and Zara, which are classified as fast fashion, could also expect to see growth of 56 per cent.

However, it was traditional favourite H&M that was seen as being the retailer who will see the greatest levels of growth in the remainder of 2010. 26.5 per cent of those polled said they expected H&M to top growth tables, while Zara was second with 20.6 per cent of the vote. In the five company query, Primark was third on 14.4 per cent, ahead of New Look on 7.5 per cent and Mango at 6.6 per cent.

High street shops have again suffered a slump in sales.

For the second consecutive month, retailers such as Marks & Spencer, H&M, Gap, Thomas Cook, Tesco and Sainsbury’s combined to record an additional downturn.

To compound matters, economists have warned Chancellor George Osborne’s tough budget will result in further cuts to consumer spending.

In the latest monthly retail survey from market analyst CBI, figures fell by five per cent in June, well short analyst’s forecasts of positive 5 per cent growth. June spending continued the trend seen in May, where a surprisingly weak rate of -18% per cent was experienced. CBI did suggest that the World Cup would offer retailers a limited respite, as will the predicted spending rush on before the VAT hike in January, but that overall the retail growth outlook remains tepid.

The survey, polled respondents from May 29 to June 10, the beginning of the World Cup, revealed that the largest spending downturn in June was in leather goods and footwear, with hardware and DIY supplies also suffering. The areas that did show increased spending were around the football tournament in South Africa, with food, drinks and television sales all up.

Despite the poor results and gloomy forecast, retailers remain optimistic that a rebound will be seen in July, and many are relying on higher consumer spending in the second half of the year before the VAT is raised from 17.5 per cent up to 20 per cent in January. The British Retail Consortium, however, has warned that the rise will cause job losses and a rise in inflation.