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Woolworths retail chain experiences lower footfall & sales levels
07 Dec '06
2 min read
In light of the recent public commentary about trading conditions in the retail sector The Board of Woolworths Group plc believes it is appropriate to update the market on its trading performance up until the end of November.
In October and November the Woolworths retail chain has experienced lower footfall and sales levels compared with previous years. Overall like-for-like sales for the 18 weeks to 2nd December are currently down by 6.5%. We continue to make progress on improving our margin and for the second half we are currently 150 basis points ahead of last year.
Sales performance varies across the different categories. The most challenging market is Entertainment, where retail prices are materially below last year. At this stage, sales of seasonal Christmas products are slow. Sales of Toys have been strong.
Customer response to our move into multichannel retailing through the Big Red Book has been very encouraging. Since its launch on 17th October, multichannel sales have increased by 160% on last year and now account for 7.5% of sales, well ahead of budget. This has added some short-term cost pressure to the business as we ensure swift and reliable fulfillment of customers' orders. These costs will reduce next year as we complete the necessary enhancements to our supply chain and delivery systems.
EUK and 2entertain continue to trade in line with expectations.
Outlook
We still have the key Christmas trading weeks to come which will determine the final outcome for the year. Given that Christmas falls on a Monday this year, there will be an extra weekend for shopping which may result in retail sales falling later than usual. However, given the sales performance of the last two months, it is appropriate to be cautious.
In order to achieve results for this financial year around the lower end of market expectations, we will need to achieve a sales uplift for the remainder of the Christmas trading period and continued improvement in the margin.
We enter this key period with well developed retail plans, a good product range, tight stocks and a strong multichannel offer.
In October and November the Woolworths retail chain has experienced lower footfall and sales levels compared with previous years. Overall like-for-like sales for the 18 weeks to 2nd December are currently down by 6.5%. We continue to make progress on improving our margin and for the second half we are currently 150 basis points ahead of last year.
Sales performance varies across the different categories. The most challenging market is Entertainment, where retail prices are materially below last year. At this stage, sales of seasonal Christmas products are slow. Sales of Toys have been strong.
Customer response to our move into multichannel retailing through the Big Red Book has been very encouraging. Since its launch on 17th October, multichannel sales have increased by 160% on last year and now account for 7.5% of sales, well ahead of budget. This has added some short-term cost pressure to the business as we ensure swift and reliable fulfillment of customers' orders. These costs will reduce next year as we complete the necessary enhancements to our supply chain and delivery systems.
EUK and 2entertain continue to trade in line with expectations.
Outlook
We still have the key Christmas trading weeks to come which will determine the final outcome for the year. Given that Christmas falls on a Monday this year, there will be an extra weekend for shopping which may result in retail sales falling later than usual. However, given the sales performance of the last two months, it is appropriate to be cautious.
In order to achieve results for this financial year around the lower end of market expectations, we will need to achieve a sales uplift for the remainder of the Christmas trading period and continued improvement in the margin.
We enter this key period with well developed retail plans, a good product range, tight stocks and a strong multichannel offer.
Woolworths Group plc
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Dr. Sameer Sood
National Institute of Fashion Technology
Salvatore Piccione
Label - Salvatore Piccione
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