Woolworths’ retail arm unveiled a fall in comparable sales this morning, with like-for-likes down 3.2 per cent for the 49 weeks to January 12, but said that the stores business would return to profitability this year.

The general retailer said that the disappointing result reflected a strategy of focusing on profitable sales, which led to a reduced level of electricals sales, a category that was strongly discounted by competitors. The poor electricals result accounted for half of the drop in like-for-like sales.

At the end of the first week of the January Sale, Woolworths had£61 million less stock than at the same point last year.

Chief executive Trevor Bish-Jones said: “Christmas was a very challenging time for the group. However, in spite of volatile and highly competitive markets, all parts of the business took steps forward.” He added that he expected Woolworths to return to profitability this year.

The two other parts of the Woolworths group – 2entertain, a joint venture with the BBC, and Entertainment Wholesale – grew 11.7 per cent and 46.7 per cent respectively. In total, the Woolworths Group’s sales increased 11.2 per cent.