Woolworths sales slip

Toys-to-sweets retailer Woolworths today said tough conditions on the UK high street had continued to take their toll on the business.

Woolworths said same-store sales at its core chain were 4.4% lower in the 24 weeks to July 16 – unchanged on an earlier update covering the first 18 weeks of the period.

In a statement ahead of half-year results, it said the retail climate had remained “difficult” and that it was continuing to take action to improve the business by keeping stock and costs under control.

The group said profit margins were still slightly below last year – but added it was starting to see the impact of action taken to reverse this trend.

Woolies has enjoyed a revival under chief executive Trevor Bish-Jones, lifting 2004 profits by 5% to £73.1m (€105.3m), although this has since been offset by the disappointing sales performance so far this year.

It recently said much of the drop in sales was down to a comparatively weaker release schedule in entertainment, which covers music, video, games and books.

It said in an update last month that it would respond to the downturn by shifting the focus at its 800 stores to higher profit areas, such as homeware, toys and clothing.

Mr Bish-Jones said today: “The retail environment remains challenging and against this background we continue to be disciplined about controlling costs and stock while taking action to improve the group’s businesses.”

The group said a store refurbishment programme was on track to convert 50 stores to a new format this year, with 20 converted so far. Sales and gross margins at these refurbished sites continued to be ahead of the rest of the business.

Woolies also said it was continuing to make progress with the sale of its entertainment chain MVC.

The group is due to announce interim results for the 26 weeks to July 30 on September 21.