Trevor Bish-Jones, CEO of the veteran high street chain, admitted that Christmas ‘was a very challenging time for the Group’. However, he found a novel way to avoid the embarrassment of admitting poor sales figures for the period – he decided not to bother telling anyone what they were (wonder if Stuart Rose wishes he’d thought of that?).
Instead, Woolies only provided figures for the 49 weeks to January 12, which saw a 3.2% drop in like-for-like sales. Bish-Jones said this was largely due to fewer sales of discounted electrical items, which Woolies is trying to avoid in a drive for greater profitability. More bad news came from its wholesale division EUK, which has taken a big hit to the bottom line because people are buying more games consoles and fewer CDs.
2entertain, its joint venture with the BBC, is doing well – sales were up 11.7% due to an inexplicably high number of people buying Top Gear spin-off DVDs. The only problem is that it’s doing so well that Woolies might be forced to sell it – rumour has it that Icelandic backers Baugur want to cash in.
But although this tale of woe sent poor Woolies’ share price even lower, there was actually some good news in there. Overall group sales were up 11% on last year. What’s more, Bish-Jones said the retail arm would return to profitability this year – and if you’ve been in one of his shops lately you’ll probably be as surprised about that as we are (last month analysts at Citigroup called its 800 stores ‘worthless’).
But who knows? As belts tighten in the UK, it could be that Woolies’ mix of cheap and (occasionally) cheerful products might actually start to see a bit more custom. Consumers tend to 'trade down' to stores like Woolies when times are tough - and with Bish-Jones’ focus on more profitable items, it could end up doing better out of the slowdown than some of its more illustrious rivals.
After all, anyone who can shift that many Jeremy Clarkson products has to be doing something right...