Business Breifing: Woolies feeling the chill

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The Independent Online

City analysts will be expecting to hear Woolworths report a loss when it unveils its interim results on Wednesday, as the high-street retailer traditionally suffers a loss in the first half of the year, before improved sales over the Christmas period.

According to David Stoddart, an analyst at Teather & Greenwood: "Last year's first half was not very good and we are expecting a similar story for this year's first half." Full-year profit before tax is expected to be £28.3m before tax, up from £21.8m, according to Reuters. What investors will be watching for are key growth areas such as Woolworths' Red Book and online sales arm. Red Book is the high-street retailer's Argos-style catalogue, which is available both in the store and onlinet. The City will be grilling Woolworths on the performance of catalogue and internet sales.

At its last market update before its half-year close period, Woolworths also indicated that the prevailing unseasonable weather had seen improved sales of indoor goods such as DVDs, music CDs and computer games. Entertainment is 35 per cent of Woolworths' product mix.

But the market has already factored in an element of caution. Just before the close period, chief executive Trevor Bish-Jones said: "We continue to be cautious about the retail environment going forward."

One analyst recently summed up the market's overall sentiment, saying: "Woolworths' management continue to play a weak hand well."

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