The run-up to Christmas is supposed to be the most benign period for retailers – the month when they gleefully rub their hands and wait for Santa Claus. For many, the next few weeks pay the bills for the year and, indeed, many shops are loss-making the rest of the time.

So December is the month when struggling retailers cross their fingers, look skyward and cock their ears for the sound of sleigh-bells. The quarterly rent bill traditionally arrives on Boxing Day, or in mid-January for tenants charged monthly.

It had been unheard of for retailers to go out of business before Christmas: that is what happens during the January hangover, when banks take a fresh look at their portfolios and decide which companies they no longer want to fund.

But such old certainties have been consigned to the era where banks were too important to fail and VAT was 17.5 per cent.

This month has already seen Woolworths and MFI fall into administration. Retailers say that the world changed on September 17 – the day that administrators were called in at Lehman Brothers.

The sickness that had long surrounded the sector morphed into a disease.

Two weeks ago the British Retail Consortium revealed that retail sales had fallen year-on-year for the first time since April 2005. The promotional posters on any high street provide further evidence of the sector’s plight. So do the weekly figures of John Lewis, the bellwether of Middle England, which has seen double-digit declines in sales in the past two weeks.

The major supermarkets, which are holding up well partly because of higher food prices after unprecedented food inflation, are the only retailers with anything to celebrate this Christmas.

Retailers say that consumers fearful for their jobs and their savings will not be coaxed to spend by a 2.5 percentage point cut in VAT – equivalent to a 2.13 per cent reduction in price.

And as if the looming recession were not cause enough for concern, its effect on retailers has been amplified.

First, the sharp depreciation in sterling has suddenly pushed up the cost of imports.

Second, the lack of available bank credit has thrust trade credit insurers into the breach and into the limelight. The value of the credit they insure has ballooned, as payment terms are stretched along supply chains in the absence of bank lending, just as the health of the companies they cover has begun to fail.

The result is a deadly scenario in which the credit insurers, which are meant to protect suppliers against a purchaser’s failure, actually hasten the company’s demise in a self-fulfilling, vicious circle.

It used to be the case that retailers could not wait for Christmas. For a sickly industry, it cannot come quickly enough.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax