High street stationery chain Woolworths has admitted that its prediction made six months ago that the retail environment would remain "challenging" has "proven to be the case".
The retailer, in a trading update released today, revealed that its like-for-like sales dropped by 7.7 per cent in the first 25 weeks of its financial year, helping cumulative sales for the group to a 3.1 per cent decline over the same period.
But it said that the 70 stores which had been refitted encountered "solid sales uplifts", pointing to the scheduled refitting of at least 30 more by the end of the financial year as grounds for optimism.
"This performance shows that for us the current retail environment remains challenging," admitted Trevor Bish-Jones, chief executive of Woolworths.
"Against that backdrop we continue to improve the business by investing in the store base, rapidly enhancing our multichannel capability and driving efficiencies through our supply chain."
Although Britain's weak retail sector has struggled for over a year, recent high-street sales have been boosted by the World Cup and by hot and sunny weather, factors which may have helped Woolworths limit their declining revenues.
The group's market value was not affected by today's announcement, however. Shares in Woolworths grew by 1.63 per cent in early morning trading.