Home entertainment cheer for Woolworths

HIGH street chain Woolworths today said it had been encouraged by an improved performance at its retail division.

HIGH street chain Woolworths today said it had been encouraged by an improved performance at its retail division.

The group, which has been suffering from falling sales amid increased competition, said first half like-for-like sales rose by 0.6% boosted by strong demand for DVDs, books and computer games.

Adjusted pre-tax losses declined ahead of expectations to £59.2m in the six months to August 4, compared with £66.8m last year.

However, Woolies warned that while it expected the improvements to continue, it remained cautious over the difficult retail environment ahead of the key Christmas trading period.

The company said its retail division benefited from strong demand for entertainment products after the release of new computer consoles, such as the Nintendo Wii, boosted computer games sales.

The launch of the final Harry Potter adventure helped bring magic back to the book division, while popular DVD releases also lifted the entertainment arm, compensating for a continued decline in the music market.

The group also benefited from the launch of its Worth It! low-priced range, which is designed to compete with supermarkets’ basic value products, after sales exceed management expectations.

However the group’s wholesale division saw losses increase by £7.2m, despite sales growth of 56.8%, as it absorbed the costs of integrating the recently acquired THE and Bertrams businesses.

Woolworths expects the acquisitions, along with a new supply contract with Asda, to boost annual turnover to £1.5bn. This compares with sales of £861.4m last year.

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