If your friend pleads not guilty, the prosecution are not normally allowed to refer to previous convictions during the trial. There are two principal exceptions to that rule:
Firstly, the prosecution can make an application to have evidence of the defendant's bad character admitted. (With just one previous conviction, that's probably unlikely).
Secondly, if your friend made any assertions, during the trial, that she'd never been previously convicted, the prosecution could disprove that statement by referring to the previous conviction.
If your friend pleads guilty, or is convicted after a trial, the magistrates will be told of her previous conviction, and will take it into account when determining sentence.
As long as the shoplifting wasn't of an exceptionally serious nature (e.g. operating, as part of an organised gang, stealing high-value items), the likelihood of a custodial sentence is almost certainly nil.
A community sentence (such as 100 hours unpaid work), together with a fine (plus court costs, plus �15 victim surcharge') is far more likely. There might also be a supervision order ( = 'probation').
I'm uncertain as to why your friend has been denied legal aid. She should make it clear, on attending court, that she wishes to be represented by a solicitor. The court will then either call on the duty solicitor or (if they believe that your friend should have been provided with legal aid) possibly adjourn the case until such time as your friend can be represented by her own solicitor.
Chris