WLW Woolworths

RNS Number:5342E
Woolworths Group PLC
14 June 2006


                                 AGM STATEMENT
                                  14 June 2006


At the Woolworths Group plc Annual General Meeting to be held at 11am this
morning, the Chairman, Gerald Corbett, will give the following update on current
trading and the Group's development.

"Total Group sales from the combined retail and entertainment wholesale and
publishing businesses for the 19 weeks to 10th June 2006 have decreased 0.4 per
cent.

Trading in the retail part of the business has remained difficult.  Woolworths
like-for-like sales were down by 6.7 per cent.  Of this decline, 0.5 per cent is
due to 54 stores having been closed for periods during the 19 weeks to enable
their 10/10 refit.  The sales performance post refit has been encouraging, with
the uplift exceeding that achieved in prior years.  A similar number of stores
are scheduled to be refitted over the remainder of the year.

At a category level, performance has been very mixed.  At one end of the
performance spectrum have been the Entertainment categories.  Here a weak market
in tandem with competitive pressure have been the most significant factors
impacting like-for-like sales performance.  At the other end of the spectrum
have been the outdoor living and outdoor toy categories which have posted good
year-on-year increases, supported by our much strengthened multi-channel
capability.

Easter trading was within the period upon which we are commenting.  Sales of
Easter Eggs produced a positive result despite the difficult market.  Tighter
buying, with the emphasis on everyday low prices and products exclusive to
Woolworths, led to a higher sell through of Eggs and improved cash margin
generation.

During the 19 week period we have continued to implement changes to evolve
toward a more efficient supply chain for Woolworths.  This improved supply chain
will allow us to reduce overall stock levels and drive up margins through more
effective deployment of stock.  We are beginning to see the results of the
activity in this area.  Woolworths stocks are currently some #15 million below
the prior year levels.  To achieve part of this reduction we have been clearing
stock from the stores and, as a result, gross margins for the year to date are
below the prior year.  This is expected to recover in the second half and we are
anticipating a full year improvement in gross margin of 100 basis points.

Third party sales at Entertainment UK (EUK) for the 19 week period were up 21.2
per cent.  EUK continues to seek new customers to replace the Tesco business,
which ceases in April 2007 and to broaden the scope of its capabilities.

2 entertain, the Group's 40 per cent owned entertainment publishing joint
venture with BBC

Worldwide, continued to trade well, with sales in the 19 week period up 4.0 per
cent.

We anticipate that the retail environment will continue to be challenging.  In
the short-term, we expect England's participation in the World Cup to reduce
overall high street footfall.  Against that background the Board will remain
focused on controlling costs and generating cash.  The first half results will
carry the costs of the stock and supply chain measures which have been initiated
to generate improved performance particularly over the crucial Christmas trading
period.  It is also important that we continue to invest in the business.  A
prime focus over the summer months will be to continue to develop our
multi-channel capability in readiness for Christmas and to complete this year's
store refurbishment programme."


For further information contact:

Kirstie Hamilton, Tulchan Communications 020 7353 4200

Celia Gordon Shute, Tulchan Communications 020 7353 4200



                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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