Woolworths delivers 25pc profit hike to $2.26 billion THE nation's biggest supermarket chain, Woolworths, forecast higher profits this year as a price war on staples including milk to attract shoppers helps it overcome the weakest retail sales growth in the country in more than half a century. The retailer--which also operates chains of household goods and liquor stores as well as gas stations and bars--said Wednesday its net profit jumped 24 per cent to $2.26 billion in the year through June from $1.82 billion last year. "This strong result comes against the backdrop of challenging retail conditions," said Grant O'Brien, chief executive and managing director of the company. The retail giant suspects that uncertainty ahead of the September 7 poll has had an impact on its business. " (But) we won't really know until such time as this election is out of the way as to the true effect it has had on consumers," Mr O'Brien told reporters today. Retail sales in Australia grew at their weakest pace in 51 years in the year through June, rising just 2.5 per cent on a year ago, according to the Australian Bureau of Statistics, reflecting cost-of-living pressures and a flat job market, even though the central bank has lowered interest rates to historically low levels. Woolworths said it is hopeful of a modest improvement in market conditions over the course of the current fiscal year, which should lift profit 4 per cent-7 per cent, stripping out one-time items and the extra trading week in the just ended fiscal year. Pre-tax earnings for the company's core supermarkets division were up nearly nine per cent to $3.06 billion, while earnings from its petrol division rose eight per cent to $138 million. Its Big W business lifted its pre-tax earnings seven per cent to $191 million while Woolworths' hotels division recorded a 35 per cent rise in earnings to $264 million. But Woolworths' home improvement business Masters recorded a loss of $139 million during the year. The company is rolling out the brand to compete with Bunnings, which is owned by rival Wesfarmers. The company lifted its full-year dividend payout by 5.6 per cent to $1.33 a share.