A reorganization within the store forces the staff of the gentlemen's ready-to-wear department to share their floor space with the Ladies' Department. Mrs. Slocombe, head of the Ladies, and Mr. Grainger, head of the Gents, immediately come to loggerheads over control of the center floor display. Mr. Grainger refuses to take down his trousers and put Mrs. Slocombe's underwear in its place. Undaunted, she goes over his head to Captain Peacock, and then to Mr. Rumbold.

It's Mr. Grainger's 37th anniversary at Grace Brothers and the Department hosts a celebration dinner for him. It's a time of happiness, and dread, for if he receives a cuckoo clock then it means he's to be retired.

A fuel shortage grips the country and Grace Brothers, so the stores furnaces are shut down for the day. The staff are freezing and soon develop unique ways to keep warm.

There's trouble afoot at Grace Brothers! Someone's been lifting Mrs. Slocombe's skirts and putting their hands in Mr. Grainger's drawers. Shoplifting has struck the store and Mr. Rumbold installs a store detective and a video surveillance system. It goes off track for awhile, as Mr. Rumbold turns into a voyeur and the staff act like they're on television. Ultimately, the staff decide to do in the scheme and prey on Mr. Rumbolds hypochondria to accomplish it.

The Store's redecoration plans threaten to interfere in the staffs vacations. Everyone is now expected to take the same two weeks off and there's disagreements on how to handle it. Grace Brother's Tour Group Company offers some package deals, but they are far from First Class.

Mr. Humphries begins displaying his ability to read palms and tell the future. He sees that Captain Peacock will soon be "climbing the ladder and wearing a new hat". Everyone takes this to mean a promotion, especially now that there's a vacancy on the Board of Directors and Mr. Rumbold is in line for it. Captain Peacock expects to take Mr. Rumbold's job. The department staff soon all imagine moving up.

Mr. Grainger is 5 minutes late coming back from his coffee break and this sets in motion a management scheme to monitor all breaks. The staff must sign in and sign out when they leave and return to the department. The department staff revolt and union action is taken

Captain Peacock is celebrating his 20th year at Grace Brothers, and while his request for a raise has been turned down, he has been given a key to the Executive Wash Room and the privilige of eating in the Executive Dining Room. He lords this over the department staff and Mr. Grainger decides to make some trouble.

Illnesses strike the Department, and Mr. Lucas decides to fake his to get the day off. His plan backfires as he is assigned to the Ladies Counter as a sort of "quarantine".

Naughty sayings on her underwear push Mrs. Slocombe to the brink of giving her notice, but then it's discovered that Old Mr. Grace plans to ask a member of the staff to marry him. When he calls for Mrs. Slocombe, everyone assumes she's the one.

Grace Brothers hosts a week long sales event by selling only German goods. The staff, however, find that the German customers they are getting only want British goods. Captain Peacock objects to the "uniform" he's expected to wear and Mrs. Slocombe gets into the German wines.

Mr. Goldberg is hired as a junior after having recently run his own small tailoring business. To Captain Peacock's chagrin, the staff learn that Mr. Goldberg had served under the Captain but recalls those army days differently.

Mrs. Slocombe temporarily takes the place of Mr. Rumbold, who has taken ill . She eats the cream cakes she finds in his office. But she then gets a call from the hospital warning that the ice cream is what made him ill.

When the staff of the Ladies' and Gents' departments don't participate in a strike, relations between them and the rest of the store's employees become understandibly bitter. In order to improve the mood, the staff presents a life-size Punch and Judy show for the other employees' children.