But traditional routes take hit
Variety retailer Woolworths revealed like-for-like retail sales slid 4.6 per cent for the six weeks to January 13. However, full-year profit - excluding the impact of the collapse of Music Zone, a retailer supplied by Woolworths' THE business - remained in line with market expectations. Total group sales increased 2.2 per cent for the period.

Customer response to Woolworths' multichannel offer and the launch of the Big Red Book was very positive. Orders exceeded expectations and there was a 204 per cent growth in multichannel sales over the six-week period.

CD, DVD and seasonal confectionery sales were poor in the run-up to Christmas and market weakness was driven by marked price deflation. Toy and clothing sales were comparatively strong - the latter due to investment in in-store Ladybird shops. Sales of merchandise in the January Sales are ahead of last year.

Trading at 2Entertain - the joint venture with BBC Worldwide - met company expectations, with DVD sales of Planet Earth a notable success.

Sales of the combined EUK and THE increased 24.2 per cent and the company expects a 'satisfactory' trading profit. However, in early January, Music Zone - a customer of THE - entered administration. Woolworths Group is working with administrators to recover the debt accumulated, estimated to be between£2 million and£4 million.

Woolworths chief executive Trevor Bish-Jones said: 'Both 2entertain and EUK performed well over the Christmas trading period and in the full year to date. Woolworths retail found some of its traditional markets more difficult, leading to disappointing like-for-like sales over the Christmas weeks.

'Despite this, stock levels have been well-controlled and we continue to improve our gross margins. We continue to work at building a better business through investment in stores and systems and the development of a multichannel capability, which is being rapidly embraced by our customers.'

The retailer also revealed it will acquire Bertram Group, a leading book wholesaler, at a cost of approximately£29 million. Bish-Jones added: 'The acquisition of Bertram is another important step in the strategic development of the group's Entertainment Wholesale business. It further diversifies our customer base and increases exposure to the growing book market.'