Woolworths sales drop further

29-07-2008

Woolworths sales drop further
Woolworths has reported a further 6.7 per cent in like-for-like sales as its search for a new chief executive goes on.

In the six weeks to July 26th, like-for-likes fell 6.7 per cent while group sales for the last 25 weeks were down 3.1 per cent.

The retailer said due to a larger proportion of its sales coming from low-margin items such as CDs and DVDs, its profit margin in the first half is predicted to be 1.25 per cent below last year.

As part of its strategy to revive profits, Woolworths is selling four of its stores to grocer Waitrose.

The disposal of three of these should be completed this week, with the fourth due in the late summer, Woolworths said.

Woolworths will receive £18 million on completion of the three stores with the balance of approximately £7.5 million on completion of the fourth store.

Woolworths' chairman Richard North said: "The board of Woolworths is continuing the search for a new chief executive to take the group on to the next stage of its development.

"In the meantime, we have begun the detailed work that needs to be carried out to rebuild the retail business around the core of more profitable small and medium sized stores."

The decline in sales is due to a worsening of conditions in June and July, in an increasingly competitive market, Mr North added.

Official figures from the Office for National Statistics show retail sales fell 3.9 per cent in June.

Woolworths said it remains cautious about the outlook for retail given the background of a weakening consumer economy.

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