Weak, but no train smash

Finweek English Edition - - MARKETPLACE SIMON SAYS -

The much-an­tic­i­pated Wool­worths* trad­ing up­date ar­rived and it is bleak. At the top level HEPS is ex­pected to be down 5% to 10% while I was ex­pect­ing it to be flat or only slightly down. So it is a lit­tle worse than ex­pected. Food sales are weaker as some con­sumers are shop­ping down, and cloth­ing con­tin­ues to strug­gle, as has the whole sec­tor lo­cally with new en­trants tak­ing mar­ket share. This divi­sion per­formed slightly bet­ter than I had ex­pected as I thought more shop­pers would be shop­ping down to cheaper brands. Seem­ingly this has not been hap­pen­ing to such a great ex­tent yet. Aus­tralian ac­tiv­i­ties were mixed, with Coun­try Road fi­nally com­ing to­gether with a bet­ter sec­ond half. So, a weak per­for­mance over­all, but it is no train smash. Woolies will strug­gle in tough eco­nomic con­di­tions and as a share­holder I ex­pect this and con­tinue to hold.

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