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Woolworths Group updates market on trading

Published: 29 July 2008
Group sales for 25-week period to July down by 3.1%
Woolworths Group updates market on trading
Ahead of its half-year close period, Woolworths announced that its group sales were down 3.1% for the 25-week period to July 26. Sales in Woolworths Retail were also down by 3.2%.

Since last updating the market, Woolworths Retail like-for-like sales for the six weeks to July 26 have fallen by a total of 6.7%.

According to the company, due to the continued strength of the entertainment market, a larger proportion of sales have come from lower margin CDs and DVDs, with a lower proportion from higher margin outdoor products and clothing.

This, combined with additional clearance activity and discounting, mean that the margin rate in the first half of the year is expected to approximately 125 basis points below last year.

By July 28, Woolworths also expects to complete the disposal of three of the four of its stores where the leases have been assigned to Waitrose. The fourth store will change hands in late summer.

Woolworths will receive approximately £18million on completion of the three stores, with the balance of approximately £7,5million on completion of the fourth store.

The Woolworths board continues its search for a new ceo to take the group forward and has also undertaken a review of the group's businesses.

Chairman Richard North said: "The retail business has seen a marked worsening of conditions in June and July in an increasingly competitive market."
Adding: "Sales over the first half as a whole have been achieved with a disappointing margin performance."

He concluded: "We remain cautious about the outlook for retail given the background of a weakening consumer economy. But we have a strong operational management in place in all parts of the business who are working hard to ensure that the needs of all of our customers are met."

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