Woolworths up 21pc despite NZ strike

SYDNEY - Grocery giant Woolworths has seen its New Zealand returns dented by last month's industrial action.

The company - which owns Progressive in New Zealand - posted a 21 per cent rise in first quarter sales as its Australian food and liquor business continued to perform well.

But it recorded flat sales in New Zealand because of industrial action which saw distribution workers at its Foodtown and Countdown supermarkets strike during September.

Australia's biggest retailer - which is also embroiled in the battle for control of The Warehouse - reaffirmed its profit and sales guidance for the current financial year.

Asked for a comment on the rationale and plans behind taking a stake in The Warehouse, Woolworths chief executive Michael Luscombe said: "Our only comment at this stage is that we have a 10 per cent stake in a really good New Zealand retailing company."

Woolworths delivered a 21 per cent increase in sales from continuing operations to $A10.7 billion ($12.29 billion) for the first three months of the 2007 financial year.

In New Zealand, comparable supermarket sales were flat due mainly to the industrial action in September, which has since been resolved with operations at distribution centres back to normal.

Across the whole group earnings before interest and tax were still expected to grow faster than sales with net profit growing in a range between 16 per cent and 21 per cent.

Woolworths made a net profit of $A1.01 billion in 2005/06.NEW BOSS - C3

- AAP