Inspired by yet more sensationalist journalism, the swine flu pandemic panic swept across the country. Now, we all know that no more people are dying of swine flu than normal seasonal flu, and if you're vaguely healthy you don't have much to worry about, yet this would be hard to believe from the headlines.

All year we've had to put up with all the scare stories about the economy terrorising everyone and now it's another juicy story, with half the population smothering themselves in antiseptic handwipes (bet their sales results are wicked). As a result, footfall has been down, and as we all know you can't sell stuff to people who aren't in your shop. (although online retailers aren't complaining !)

The question here is, what happens now?

Flu in any of its forms is not going to quietly depart, so how many sick days can the nation take, hiding under the collective duvet trying to avoid it? Rising sick days isn't a groovy prospect for retailers – it reduces customer service, possibly opening hours and sensationalist scare stories keep consumers away from usually crowded shopping areas, so most businesses would welcome a little more balanced reporting perspective.

According to high street sales trackers, like- for-like sales fell in July, although some of that is due to shops changing over from selling through sale items to the new full priced lines coming in for the new autumn winter season.

Personally, I can still see sales taking place all over the high street, shops are full of summer clothes at reduced prices, probably due to the predictions for a barbecue summer, and while many businesses are benefiting from the rise in staycations - notably the homewares market – many more are wishing it would just stop raining.

One store that's bucking trends is River Island which has totally defied the current market and announced record sales and profits of £160 million for the year ending December 2008.

While you might think that stores selling young fashion would be more immune to the effects of the recession, they are quick to point out that a lot of young people today are carrying vast amounts of debt, and that the under-24s' market – River Island's core market – is the fasting growing segment of unemployed in the country. However, it'll be interesting to see what this year's figures look like as there's obviously been a massive investment into new stores, with two mega stores in Peterborough alone.

So, where's the good news? Probably the best news around for importers is the recovery of the pound. In July 2008, the pound was worth $2.00, but by January of this year its value had sunk to $1.35 (which is a 23-year low, just to put this in perspective). Earlier this month it recovered to $1.70. The bad news for many of the big chains is that this won't have too much effect as they're tied into currency agreements, while for smaller importers like ourselves it's an absolute lifeline in a difficult year.

So, while this is a lifeline for retailers, it's not clear if it will be passed on to consumers. Stores are likely to feel that they need to keep some margin back as there's the reinstatement of the VAT rate to look forward to, and we'll still be in tough market conditions next year. . .

The big question is whether the pound's recovery will be a sustained one. Here's hoping...