Ahead of Woolworths' AGM today, Woolworths chairman Gerald Corbett said: 'The softening of the like-for-like performance reflects that in the comparative period last year we cleared stock aggressively, generating sales. With our improved stock quality, such activity was not required this year.'
However, total sales from its combined retail, entertainment wholesale and publishing businesses soared 11.4 per cent over the period. Corbett said: 'The early warm weather drove good sales of Ladybird clothing and our outdoor ranges. Customer response to the second version of our Big Red Book has been positive and our multichannel sales have doubled.' But he added: 'This rate of growth will inevitably slow in the second half of the year.'
Third-party sales at its entertainment wholesale business EUK rocketed 28.4 per cent and Woolworths anticipates sales will exceed£1.5 billion for the present year. However, the group said that following the referral of EUK's acquisition of Bertram to the Competition Commission (CC), it has been unable to push ahead with the planned integration of THE's independent books business. The retailer expects the outcome of this investigation by September, but forecasts additional costs relating to the inquiry of about£1.8 million for the year.
Corbett added: 'While the group has had a solid start to the year, it is difficult to predict the retail environment going forward. We thus approach the second half with a degree of caution. In continuing to plan for a challenging retail environment, we will run the business tightly, with a focus on cash generation, cost control and improved margin performance.'