Wonder of Woolies still missing as sales stall

Woolworths, the high street retailer demerged from Kingfisher last year, has continued its disappointing run with a weak trading statement which pushed the shares down 11 per cent.

Group like-for-like sales in the 15 weeks to 18 May were flat compared with last year, with the 116 city centre stores the worst performers. Those stores saw underlying sales down 3 per cent.

The statement, given at the group's annual meeting yesterday, marks a slowdown from the end of March when the company reported its full-year results. Then, Woolworths said like-for-like sales were up by 6.2 per cent on the previous year, though these figures were helped by the timing of Easter.

Yesterday, the company said Easter trading had been satisfactory but that April had been disappointing. May had begun more strongly.

The warm weather in early April boosted sales of garden products but childrenswear and kitchen goods were poor.

"There's not a lot here to get excited about," one fund manager said. "The only area where they're doing well is gardening, and I wouldn't expect they'll be able to keep that going for very long when the DIY boys get going."

In March, Woolworths reported a £46m loss due to £72m of exceptional charges, including massive write-offs for millions of unsold CDs and DVDs. The shares closed 5.5p lower at 44p.

Elsewhere on the high street Allders, the department store group, reported a sharp fall in first-half profits due to restructuring costs and new store openings.

The group, which opens a new store on London's Oxford Street today, said profits fell to £10.5m for the six months to March, compared with £16m in the previous year.

Like-for-like sales were down by 0.4 per cent in the same period last year. This represents a slowdown from the 1.7 per cent growth recorded over Christmas.

Allders is best known for household products and, despite the housing boom, appears to have missed out on the potential sales bonanza.

Allders' results contrasted with strong figures at MFI and Homestyle. MFI reported a 12 per cent increase in orders for the past 20 weeks. MFI has benefited from redesigned stores and new ranges. The shares rose 6.75p to 152p.

Homestyle, which includes the Harveys and Rosebys furnishings stores, reported a 27 per cent increase in full-year profits to £36m. Like-for-like sales in the three months to 19 May were up 11 per cent on the previous year. The company is refitting its 184 Harveys stores and has completed work on 109. With the refurbishments, it expects to boost its share of the UK upholstery and cabinet market, now at 6 per cent.

"We've got oodles of opportunities for potential expansion in the UK," said chief executive, Michael Rosenblatt.