Woolworths Retail forecasts return to profit

Woolworths’ Retail is expecting to return to profit said Woolworths Group today, as it released its trading figures for the 49 weeks to January 12 2008.

Total group sales – covering 2entertain and Entertainment Wholesale as well as Woolworths Retail – increased by 11.2%. The group said the performance came against a backdrop of volatile and highly competitive markets. Across each of the businesses it had worked to optimise profit and anticipated that year-end profits would be ahead of the previous year’s.

At Woolworths Retail like-for-like sales for the period were down 3.2% as the company focussed on profitable sales. This approach had the greatest impact in the electrical product categories, where there was fierce discounting across the sector.

However, the group said that Woolworths Retail should become profitable again in the current year: “While the absolute level of profitability will be low, this is an important reversal of the prior year loss and will have been achieved against a background of tough competition and reduced consumer confidence.”

The group said it continued to be concerned about the underlying level of consumer confidence during 2008. “As such we will continue to be cautious in our planning, placing emphasis on cost control, margin control and cash generation.”