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 division —
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.

Source: Business Day