Woolworths has seen group sales rise by 11.4% in the 17 weeks to 2 June, helped by strong growth at its entertainment wholesale business.
Woolworths is bagging more business in the wholesale market
But sales in Woolworths' shops were down against the same period in 2006, when it slashed prices to clear stock.
Sales at the firm's entertainment wholesale arm rose 28.4% helped by a deal with Virgin Retail.
Woolworths said that while it had seen a "solid" start to the year, it was difficult to predict future sales.
"We thus approach the second half with a degree of caution," the firm said in its trading update.
A tough High Street environment saw Woolworths' shops lose £12.9m in the year to April 2007 and rising interest rates and restrained consumer spending are a continuing concern for the group.
Woolworths operates 800 High Street shops but relies on the supply of DVDs, CDs and video games to third parties for a large part of its group profits.
Total sales in Woolworths Entertainment Wholesale businesses are expected to reach £1.5bn in the current year, the company said, after it agreed a deal to supply Asda.
Woolworths credited improved stock control with eliminating the need to repeat the 2006 price cuts in its stores during early 2007.