Woolworths has revealed record first-half losses before tax of £99.7 million for the 26 weeks to August 2, compared with a £63.8 million loss posted at the same point last year.
Like-for-like sales at Woolworths’ Retail business fell 3.2 per cent and gross margin was down by 112 basis points. Group sales fell 3 per cent in the period, to£1.1 billion.
Retail like-for-likes for the first six weeks of the second half, however, rose 0.4 per cent. During the six-month period, retail sales declined 5 per cent to£660.7 million.
Woolworths’ entertainment wholesale and publishing sales were flat at£446.3 million. A profit of£2.2 million was made, compared with last year’s£2.4 million.
The retailer believes it can continue to operate within its existing borrowing facilities and is making changes to its stock operations, saying it has “started to reinstate basic operational standards of value, availability and service, alongside a ruthless drive for business simplification. Small- and medium-sized stores will be placed at the heart of the organisation”.
Woolworths Group chairman Richard North said: “For the first half of the year, EUK and 2entertain are performing ahead of our expectations, while Woolworths Retail manifestly is not. However, the board believes that the strength of our entertainment businesses provides a solid platform of profitability from which the turnaround of the retail business can be based.”
Woolworths chief executive Steve Johnson, who joined the business two weeks ago, said: “I took this job because I am convinced that there is space on the high street for a successful home-based variety store offering great value and convenience. My first weeks in the job have only reinforced that view and shown me that Woolworths has a core of strong, profitable stores, a great retail brand and many very committed people who want to succeed.
“It is too early for me to have a fully developed strategy. That plan is in progress, but still some way from completion and we will update investors as soon as possible. “Right now, this business does not require lots of new strategic initiatives; it requires a good dose of basic shopkeeping and attention to the detail of retailing. Everyone in Woolworths is clear that our first priority – in all parts of the group – is delivering a successful Christmas for our customers.”