Shoppers out in force but not at Woolies

SHOPPERS returned to the High Street in the last few trading days of 2004, helping to ease fears that retailers were set for a dire December.

But Woolworths today confirmed fears that it had had a tough Christmas. The group revealed that in the four weeks to January 1, like-for-like sales in its main stores were flat against last year. This followed a weak November in which sales of entertainment products and toys were disappointing.

The company blamed a shortage of electronic games hardware for the lower-than-expected figures. It also said that key DVD releases had done much worse than expected. In toys, the overall market was difficult and the sales uplift in the Woolworths Mainchain did not fully reflect the increase in space given to them.

Chief executive Trevor Bish-Jones admitted that the sales performance had disappointed him, but added: 'We have made good progress on improving the gross margin and remain confident about the potential of Woolworths and our Entertainment businesses. Using our strong positive cash flow we are confident that continued investment in our stores will underpin future growth.'

New statistics from retail research body Footfall today showed the number of shoppers visiting stores in the six days to December 31 was up 7% on the previous year. The increase came despite a 5.9% fall in shoppers last Monday, the first proper day of the post-Christmas sales.

While the number of people entering stores does not automatically translate into sales, retailers will be relieved to see a rise in shopper numbers. Anecdotal evidence, however, suggests that the crucial Christmas period when retailers hope to make most of their annual profit has been tough. Many were forced into heavy discounting and pre-Christmas sales days to boost turnover.

John Lewis, the unquoted department stores group, last week revealed an 11% increase in sales during the first three days of its discounting clearance. And the next few weeks will see other listed companies update the market with details of their December trading performance.

Richard Hyman, chairman of Verdict Research, said he plans to stick with his prediction that the public will have spent a record £75.8bn over the Christmas period - a rise of 3.9% on last year on the back of cheaper gifts and wage growth.