The high street retailer said its Entertainment UK business (EUK) was set to lose £10m in profits next year after admitting Tesco would be “unlikely” to renew its three-year contract once its expires in February 2007.
EUK, which supplies home entertainment lines to the supermarket chain, currently relies on Tesco for almost half of its revenue.
At a conference call, Woolworths chief executive Trevor Bish-Jones said the business would also be hit by the decline in the entertainment market and said a renewal of the Tesco contract was not expected after the supermarket had not accepted its “best” terms.
Bish-Jones said the loss of the supply deal would be a “disappointment,” but insisted the business would recover after suffering a similar setback with the loss a contract with Asda in 1998.
