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Last Updated: Tuesday, 4 January, 2005, 16:48 GMT
Festive sales flat at Woolworths
Woolworths store
Woolworths' performance will concern other retailers
Woolworths' shares have fallen 5.63% after it reported flat sales growth over the Christmas shopping period.

The retailer said like-for-like sales growth was flat in the four weeks to 1 January compared with a year ago, a result it described as "disappointing".

Woolworths is one of the first big High Street names to comment on its festive sales performance.

Some retail experts fear several UK retailers could report Christmas sales weaker than last year.

Rhys Williams, a retail analyst at Seymour Pierce, told Reuters he believed other leading store groups such as Marks & Spencer and Matalan may have found the going tough over the crucial pre-Christmas period.

"I'd take this as a sign that quite a few others will have struggled as well," he said.

Cost control

Although we are disappointed with the sales performance in our retail business we remain confident about the potential of Woolworths
Trevor Bish-Jones, Woolworths chief executive

Woolworths blamed the poor result on worse than expected sales of toys and DVDs.

Like-for-like sales at its main stores also slipped 1.5% in the 48 weeks to 1 January.

Despite the poor sales performance, Woolworths stressed that it had kept costs under tight control and expected its pre-tax profit for the full year to be similar to last year's 66.7m ($126.5m) figure.

City analysts had been forecasting a profit of 78m.

"Although we are disappointed with the sales performance in our retail business, we have made good progress on improving the gross margin and remain confident about the potential of Woolworths and our entertainment businesses," said chief executive Trevor Bish-Jones.

'Looking for a deal'

Many people had delayed their shopping to the last minute while pre-Christmas trade had been driven more by promotions and discounts than in past years, he added.

"The reality is that consumers - on the back of interest rate rises and higher utility bills - were looking for a deal this Christmas."

Like-for-like sales at MVC, the music and entertainment chain owned by Woolworths, were down 4.7% in the four weeks to 1 January compared with a year ago.

Sales at Woolworths larger format big W stores fell by 8%.

Woolworths' shares closed down 2.25p, or 5.63%, at 37.5p.

Shares in other store groups also fell on concerns about the strength of Christmas trading, with WH Smith slipping 3p to 310p, and Body Shop shedding 8p to 152.5p.

Other retailers will provide updates on their pre-Christmas trading over the next three weeks.


SEE ALSO:
Retailers to unveil festive data
03 Jan 05 |  Business
More UK bargain hunters hit sales
29 Dec 04 |  Business
Woolworths aims at Christmas lift
08 Sep 04 |  Business


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