25 Jan 2011

Woolworths downgrades full year profit

6:44 am on 25 January 2011

Australian retailer Woolworths has lowered its profit forecast as subdued consumer spending, the Queensland floods and Canterbury's earthquakes dented its earnings.

The owner of Progressive Enterprises, which operates the Countdown, Woolworths and Foodtown supermarket chains in New Zealand, expects its full year profit to rise by 5% to 8% this year.

In August, it expected growth of between 8% and 11%.

The retailer says consumers have cut their spending due to higher interest rates and petrol prices, and that's likely to remain the case for the second half of the year.

It says Canterbury's earthquake and floods in Australia will also hit earnings because some of the more complex insurance claims will take months to complete.

Trading at the retailer's Dick Smith electronics stores in New Zealand has also been weak.