Woolworths saw a decrease in sales during 2007 after it refused to reduce the price of products as part of its strategy to return to profit.
The retailer said that like-for-like sales were down 3.2 per cent for the previous 49 weeks to January 12th, but said that it expected that its High Street stores would return to profitability this year.
It said that its strategy of not slashing prices on general and electrical products had led to a decline in revenues, with it citing price-cutting by its competitors as the main reason why it saw poor sales in that area.
The Woolworths Group’s chief executive Trevor Bish-Jones said in a statement to the market: "Christmas was a very challenging time for the group. However, in spite of volatile and highly competitive markets, all parts of the business took steps forward."
The company added: "[We] to be concerned about the underlying level of consumer confidence during 2008. As such we will continue to be cautious in our planning, placing emphasis on cost control, margin control and cash generation."