Will there be Christmas party products at Woolworths?

03/10/2008

Christmas party hosts hoping to stock up on supplies from Woolworths could be in for a disappointment.

With this year's Christmas predicted to be the worst for retailers since the 1970s, Woolworths has been singled out as particularly vulnerable.

An analyst at Panmure Gordon, Philip Dorgan, said Woolworths was under threat due to its continued weak product availability in stores. "We believe that the current retail environment is the worst for more than 30 years, and we see it as a no-brainer that a retailer which seems to be struggling to get stock ahead of its most important trading period represents a risky investment," he said.

Dorgan went on to say that Woolworths is trying to improve availability by clearing stock, but the retailer faces further problems because the scaling-back of the insurance cover that credit insurers give to some suppliers to trade with it.

Woolworths' auditors released an interim results statement last month which said: "These disclosures indicate the existence of material uncertainties which may cast significant doubt about the company's ability to continue as a going concern."

In August, Woolworths - which also owns Entertainment UK, a music wholesaler, and 2 Entertain, a joint venture with the BBC - turned down a bid by a consortium led by Malcolm Walker, the chief executive of Iceland, the frozen food supermarket chain.