WLW Woolworths

RNS Number:9512G
Woolworths Group PLC
04 January 2005

                              Woolworths Group Plc


                        Post-Christmas Trading Statement


                                 4 January 2005





Woolworths Group plc is today providing an update on its trading performance
over the Christmas period and for the 48 weeks to 1 January 2005.


In the four weeks to 1 January 2005, like-for-like sales in Woolworths Mainchain
were flat against last year. This followed a weak November in which sales of
entertainment products and toys were disappointing. In entertainment, there was
a shortage of electronic games hardware and key DVD releases underperformed
market expectations. In toys, the overall market was difficult and the sales
uplift in the Mainchain did not fully reflect the increase in space given to the
category.


In the four weeks to 1 January 2005, like-for-like sales at Woolworths big W
declined by 8.0% and at MVC by 4.7%. The performance at Woolworths big W
reflects the impact of the phased exit from a number of non-core categories in
preparation for the disposal or cut down of a number of sites. MVC was impacted
by an unusually high number of competitor openings in over two thirds of its
catchments.


In the 48 weeks to 1 January 2005, total Group sales, including share of joint
ventures, rose by 2.9%, with the Entertainment Wholesale and Publishing
businesses up by 31.6% and the Retail fascias down by 3.3%. Like-for-like sales
in the Mainchain were down by 1.5%, Woolworths big W was down by 4.1% and MVC
was down by 5.3%.


The gross margin for the combined Mainchain and Woolworths big W businesses has
continued to improve and subject to the year-end store stock counts, it is
anticipated that for the year as a whole it will be approximately 30 basis
points ahead of last year.


Despite the weak retail sales, the Group maintained a tight control over costs
and stock. As a consequence, it is anticipated that at the year-end, seasonal
stocks will be at a comparable level to last year. Throughout the year, the
Company has performed well operationally and has delivered a high level of
in-store availability together with improved levels of customer service.


At the 58 refurbished 10/10 stores, sales and margins continue to perform ahead
of the rest of the Mainchain. This performance, combined with second year growth
and reduced capital expenditure per store continues to evidence a sound
investment case.


Good progress continues to be made with the restructuring of Woolworths big W.
Contracts have been exchanged for the complete disposal of seven sites subject
to receipt of landlord approval. Interest has been shown in the excess space in
a number of the remaining stores and two stores were cut down in October and
traded through Christmas. The net exceptional cost of the big W restructuring is
not anticipated to exceed the guidance given last March, although it will be
spread across two financial years and the cash impact is expected to be
substantially lower. A more detailed update will be given within the preliminary
results announcement.


Entertainment UK has performed well over the Christmas period and despite the
pressure on its gross margin the increased volume from new customers will result
in its profits for the year being marginally ahead of last year.


2entertain, our joint venture with BBC Worldwide, has enjoyed a particularly
strong Christmas with three titles ("Little Britain-Complete First Series", "
That Peter Kay Thing" and "Jeremy Clarkson-Hot Metal") all being in the top 20
DVD chart in the week before Christmas. As a consequence, the full year profit
contribution to the Woolworths Group from video and music publishing will be
ahead of last year.


The Board anticipates that the Group profit for the year, before tax,
exceptional items and goodwill, will be similar to last year.


Commenting on the Christmas trading performance Trevor Bish-Jones, Chief
Executive said:


"Although we are disappointed with the sales performance in our Retail business,
we have made good progress on improving the gross margin and remain confident
about the potential of Woolworths and our Entertainment businesses. Woolworths
has responded well to investment in systems and stores, which has resulted in a
better store environment, an improved product offering and has made us
significantly stronger operationally. Using our strong positive cash flow we are
confident that continued investment in our stores will underpin future growth."


The Group intends to announce its preliminary results for the year to 29 January
2005 on the 23 March 2005.





For further information contact:


Christopher Rogers, Finance Director                       +00 44 207 706 5883

Nicole Lander, Head of Corporate Affairs                   +00 44 207 706 5653

Tulchan Communications                                     +00 44 207 353 4200






                      This information is provided by RNS
            The company news service from the London Stock Exchange
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