WLW Woolworths

RNS Number:8386X
Woolworths Group PLC
06 June 2007

                          INTERIM MANAGEMENT STATEMENT

                                 6th June 2007


At the Woolworths Group plc AGM, to be held at 11 o'clock this morning, Gerald
Corbett, the Chairman, will give the following Interim Management Statement.

"Total Group sales from the combined Retail and Entertainment Wholesale and
Publishing businesses for the 17 weeks to 2 June 2007 have increased by 11.4%.

"Trading within Woolworths at -0.6% (like-for-like) is in line with our internal
expectations for the first 17 weeks of our financial year.  The softening of the
like-for-like performance reflects that in the comparative period last year we
cleared stock aggressively, generating sales.  With our improved stock quality
such activity was not required this year.  As a consequence the gross margin
rate in recent weeks has been substantially ahead of the prior year.  We
continue to expect a full year gross margin improvement of at least 100 basis
points.

"The early warm weather drove good sales of Ladybird clothing and our outdoor
ranges.  Careful promotional management of Easter ensured we exited that period
with minimal Easter specific residual stocks in the business.

"Customer response to the second version of our Big Red Book has been positive
and our multichannel sales have doubled.  This rate of growth will inevitably
slow in the second half of the year as we anniversary functionality upgrades and
marketing activity introduced in 2006.  The supply chain to support the
multichannel offer is working well and the percentage of goods being shipped
through our own transport network is ahead of plan.

"Third party sales at EUK have risen by 28.4% in what continues to be a period
of considerable change and challenge for EUK.

"Toward the end of the reported period we ceased supply of DVDs, CDs and video
games to Tesco and have commenced supply to Virgin Retail.  The continued
development of EUK's business can also be seen in our recent announcement that
agreement in principle had been reached for EUK to supply Asda with CDs, video
games and selected elements of their DVD range.  Total sales in our
Entertainment Wholesale businesses for the current year are now anticipated to
exceed #1.5bn.

"The migration of THE's entertainment business to our West London sites from the
THE sites in Stoke is underway with a strong focus on not disrupting our
customers' business.

"Following the referral of EUK's acquisition of Bertram to the Competition
Commission, we have been unable to push ahead with the planned integration of
THE's independent books business into Bertram.  We anticipate the Competition
Commission's report by September.  In the meantime, we are bearing additional
operational costs and fees associated with the inquiry.  These costs are
expected to amount to circa #1.8 million in the full year.

"2entertain, the Group's joint venture with BBC Worldwide, has had a good start
to the year with performance in line with our expectations.  A key driver of
performance has been the international markets.  In the US, Planet Earth in its
standard and HD formats, was the venture's largest ever international shipment.

"Whilst the Group has had a solid start to the year, it is difficult to predict
the retail environment going forward.  We thus approach the second half with a
degree of caution.  In continuing to plan for a challenging retail environment
we will run the business tightly, with a focus on cash generation, cost control
and improved margin performance."


For further information contact:
 Stephen East, Group Finance Director, Woolworths Group plc        020 7479 5179
 Susanna Voyle, 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
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