Total group sales fell by 3.1 per cent for the 25 weeks to July 22.
Group chief executive Trevor Bish-Jones said: 'This performance shows that for us the retail environment remains challenging. Against that backdrop, we continue to continue to improve the business by investing in the store base, rapidly enhancing our multichannel capability and driving efficiencies through our supply chain.'
Over the next few months, Woolworths will open 92 Ladybird children's clothing shop-in-shops in its larger stores.
In August, Woolworths will also begin marketing services enabling internet and in-store customers to choose between home delivery and store collection.
Seventy stores have completed their refurbishment so far, with a further 30 expected to be finished before the end of the financial year.
The retailer working towards 'enhancing the customer offer and improving the efficiency of its supply chain ahead of the key Christmas season'.
In recent weeks, Woolworths has begun to see year-on-year gross margin gains.
Sales at the EUK wholesale entertainment distribution arm were up 10.7 per cent for the same period. The division continues to look for new customers to replace the Tesco business, which will end in April next year.
At 2 entertain, the group's 40 per cent-owned joint venture with BBC Worldwide, sales rose by 5.3 per cent.