Woolworths, the variety store chain, has posted a 4.5% rise in group sales and returned to profit due to lower shrinkage, better availability and an improved supply chain.

For the year to February 1 pre-tax profit was £38m compared with a loss of £46.4m last year. Turnover increased to £2.7bn from £2.6bn.

Sales at Woolworths out-of-town format big W jumped 46.1%, while Woolworths' sales grew 3.1% and the Mainchain up 0.2%.

Total Woolworths like-for-like sales were down 0.2%, with the Mainchain down 0.4% and Woolworths big W up 3.1%.

Chairman Gerald Corbett said: “The Woolworths business has come a long way since the demerger from Kingfisher 19 months ago.

"We now have an energetic and experienced retail team, cash in the bank, lower costs, rising profits and an increasing dividend."

Woolies plans to continue the focus on operational disciplines in 2003 to grow sales and improve operating margin through changing product ranges and space mix, coupled with new sources of supply and an increase in new product development.