Woolworths said its first-half performance was "encouraging"

The High Street retailer said adjusted pre-tax losses for the six months to 4 August were �59.2m, against a loss of �66.8m in the same period last year.

Strong demand for computer games, books and DVDs helped like-for-like sales - which strip out the impact of new stores - to rise 0.6%.

Woolworths added it remained cautious ahead of the Christmas trading period.

"Our first half performance is encouraging," said Trevor Bish-Jones, Woolworths' chief executive.

"Going forward, we remain cautious about the retail environment going into the important second half - so are continuing to run the business tightly."

Woolworths said that the wet weather in recent months had lifted sales of indoor entertainment products.

In particular, the retailer said sales of computer games had shown "significant" sales increases thanks to the introduction of new consoles such as the Nintendo Wii.

Book sales had been helped by the launch of the seventh Harry Potter book, and DVD sales had been lifted by a strong release schedule.

The boost to sales of computer games, books and DVDs was "more than enough" to offset falling sales of CDs.