Woolworths will be dreaming of a prime Christmas
By Robert Laing - Nov 16th 2017, 09:40
Woolworths will need strong Christmas sales for its interim turnover growth to outpace inflation, a trading update for the first 20 weeks of its financial year released on Thursday morning indicated.
The retailer said its overall sales for the 20 weeks to November 12 grew 2.6%, with weak performance from its Australian department store chain David Jones dragging down strong growth from its South African food division.
No rand values were provided, and the trading update did not forecast what earnings growth or decline Woolworths expects to report on February 22.
"The difficult trading conditions experienced in both SA and Australia during the last quarter of the previous financial year have continued into the current period," the trading update said.
Woolworths said its food division grew sales "ahead of the market" by 9.3%, double its internal inflation of 4.5%.
Excluding new stores, the food division grew sales 5.3%. Its retail space increased by 8.2% from the matching 20 weeks in 2016.
What Woolworths now calls its fashion, beauty, and home — previously called clothing and general merchandise — grew sales 0.7%, lagging inflation of 0.9%.
Excluding a retail space expansion of 4.2%, sales declined by 2.4%.
Measured in Australian dollars, the group’s clothing chain Country Road grew sales 8.3%.
Excluding the Politix chain which Country Road acquired in November 2016, the Australian clothing chain’s retail space shrank by 2%.
Woolworths’s Australian department store chain David Jones remained a headache, with sales declining 5.3% in Australian dollars. Its trading space was reduced by 2.2% as "we continue to drive space optimisation".
"Disruption caused by the refurbishments of the Bondi Junction Food Hall and the Elizabeth Street store, as well as from the implementation of the new inventory management system also impacted trade," Woolworths said.© BusinessLIVE MMXVII
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