Wonder of Woolies fails to impress

Woolworths reported steady Christmas sales figures yesterday, in spite of a poor performance in confectionery, some homeware products and in "events-based" goods such as Christmas trees and decorations.

Trevor Bish-Jones, the group's chief executive, insisted that the high street retailer's recovery was still on track after reporting a sales increase of 0.8 per cent over the key Christmas period.

"I think it's a pretty solid performance. I think there's a fair few retailers out there who'd be pleased to have their top-line sales moving forward and their margin moving forward. We're where we thought we'd be in terms of profit delivery for the year," he said.

Woolworths said that it expected an improvement in profitability for the year within the range of market expectations. Analysts predict it will make a profit of between £65m and £71m. But its shares fell 5.8 per cent, 2.75p, to close at 44.75p yesterday, with some analysts billing the trading performance as unexciting.

Mr Bish-Jones said: "It [the performance] is solid. I wouldn't say it's stellar but neither would I say it's poor. What it does show is the strategy is performing, that we've got control of the business and we're making progress ... the Woolworths recovery story is still on plan and still on track."

Woolworths plans to update the stock market in March on details of how many stores will be refitted and on its plans for its big W chain, its larger out-of-town stores.