That's the worry about Woolworths

IN THE days before the credit crunch became a slowdown and then, in the UK at least, a deep recession, there was hope that Guernsey could escape relatively unscathed.

Given the tremendous strength of the island's main economy – finance – and the overall deficit of staff compared to demand, optimists declared that the island could ride out the storm.

Since then the UK has acknowledged that not only is it in recession but, according to analysts, it is likely to be a deep and painful downturn.

The best efforts – and billions of pounds – of the UK government have, so far, proved incapable of turning that around.

The full effects of that downturn are now becoming clear. And it is also clear that Guernsey cannot hope to be immune.

The closing down sale at Woolworths stores across the UK is a symptom of that. Crippled by £385m. of debt, its administrator says that a buyer for its 815 stores has not come forward.

For its 30,000 staff, that is terrible news. Christmas will be a time of worry and misery for them.

Closure, sadly, could include the Guernsey store and its staff.

In this time of plenty, carol singing and conspicuous consumption such news is a bitter blow. While we may all enjoy the bargains in the sale – and Tory leader David Cameron was yesterday shown to be one of them – the real cost of that DVD must be measured in more than pounds and pence.

And if the experts are to be believed, Woolworths is far from the only high street retailer in trouble and there are many other businesses in dire need of help.

At present, Guernsey's job losses have been limited. Unemployment remains at percentage levels the UK can only dream of.

That is partly cushioned by the number of businesses operating here which are not reliant on the devastated UK markets.

However, if a business as established as Woolworths can be sunk by the storms of recession it is clear that no one can be complacent about how serious this downturn is – or how far its effects might spread.