Retailer Woolworths has revealed the departure of its chief executive and said high street sales fell 2.2 per cent in the first 19 weeks of its financial year.

Woolies said it had agreed with Trevor Bish Jones that it was the right time to look for new leadership. He will leave in three months' time after making a "significant contribution" during six years in charge, the chain said.

In a trading update, the company described the 2.2 per cent fall in like-for-like sales at its retail arm as broadly in line with internal expectations.

The company said margins came under pressure during the period because it generated a greater proportion of sales from entertainment products, rather than higher margin sales of warm weather outdoor products and clothing.

It added that its Price Drop promotional campaign would also impact on margins, although this has been offset by a boost to sales volumes.

The company predicted its Price Drop and the Woolworths Worthit! ranges would be attractive to shoppers during the current economic slowdown.

It said: "Going forward, we remain cautious about the consumer economy as we believe that the spending power of many consumers will be reduced by a number of factors including rising energy and food prices. This underlines the importance of the work we are doing to improve our value credentials."

Including the company's DVD and CD wholesale business, sales for the 19 weeks to June 14 were down 1.9% on a year earlier.

David Stoddart, an analyst at Altium Securities, said he planned to keep his forecasts unchanged following today's update. He added: "Although margins are behind target, a normal weather pattern should see the shortfall recovered."

Woolworths, which holds its annual general meeting today, said Mr Bish Jones would continue in his post for the next three months to enable a search for his successor to be undertaken.

Chairman Richard North said: "Trevor has been with Woolworths for six years. In that time he has been a tireless chief executive and has made a very significant contribution to the group.

"It has been agreed between the board and Trevor that this is an appropriate time to seek new leadership for the business."