Abstract
A view has developed among some retailing researchers that financial markets have, from time to time, unduly favoured the retail sector in the UK. It is argued that this has been exploited, to some extent, by retailing companies using creative, but legitimate, accounting techniques to enhance their reported profits. This article identifies the principal techniques used and assesses, in the context of the efficient markets hypothesis, whether manipulation of accounting information has been successful. It applies an event study methodology to retailing company share-price behaviour in the late 1980s and the first half of the 1990s. It concludes that financial analysts specializing in the retail sector have not been misled and that, consequently, the financial markets have not over-indulged retailers' growth aspirations.