British general merchandise retailer, Woolworths, battling to stimulate sales growth amid mounting competition, reported October 31, a slight fall in comparable retail sales for the 38 weeks of the financial year and said it remains cautious about the trading environment.
However, total group sales rose 17 percent over the same period, “driven primarily by the acquisitions and contract wins within the entertainment wholesale business,” Woolworths said.
Chief Executive Trevor Bish-Jones said the company made “good progress across all of our businesses in the year to date.”
“We are confident that, operationally, the businesses are in good shape, with strong customer propositions going into the critical Christmas trading period.
“However, we continue to be cautious about the trading environment and have planned accordingly by focussing on cost control, cash generation and margin enhancement,” Bish-Jones said in a prepared statement.
In a bid to stimulate sales, Woolworths recently rolled-out a new range of discount products, under the Worth It! brand, in its stores. The group has around 550 Worth It! products on its shelves, which range from polo T-shirts priced at 97 pence to GBP5-toasters.
The company also sells a wide range of budget homeware and confectionary goods as well as toys, DVDs and CDs through 817 stores. It also has two entertainment businesses, E.UK and 2 Entertain.
Woolworths said it is on track to book a 100 basis-point improvement for the full-year following a reduction in stock levels through an improved supply chain.
Overall, third-party sales jumped 62 per cent in the entertainment wholesale division, including THE and Bertrams, over the 38 weeks.
Bish-Jones said he remains comfortable with analysts consensus for adjusted profit, which strips out tax, exceptional items and amortization of goodwill.
Last month, Woolworths reported a fiscal first-half loss amid mounting industry competition, particularly from supermarket chains Tesco and Asda Group, a subsidiary of Wal-Mart Stores.
