The Reserve Bank’s campaign to slow inflation by slowing consumption has hit the final quarter sales of the country’s biggest retailer, Woolworths.

Woolies says 2008 earnings before interest and tax will still grow faster than sales. It’s still a strong sales performance but there are signs of the slowing level of activity.

Net profit is expected to grow in a range of 21% to 25%, the company said today in its 4th quarter and 2008 sales figures release. That’s unchanged from guidance in February when the interim profit was announced. Across all divisions, the retail giant saw a sharper than expected slowing in what retailers call same store, or comparable sales: that’s sales from stores open a year or more. The drop is especially evident in the core of the company’s business — its huge Australian supermarkets and liquor business.

The company said food price inflation dropped to 2.9% in the final quarter and for the year after peaking at 4.5% in the March quarter. The fall was due to a sharp drop in fruit and vegetable prices as the drought broke in some growing areas.

Overall sales rose 9.9% in supermarkets, but same store sales rose 4.9% in the final quarter, compared to a 14.9% jump in headline sales (unadjusted for Easter and a 53 week year).

The rise in same store sales in the fourth quarter was under the 6.3% rate for the division for the whole year and the peak of 7.6% in the first quarter of the year.

Same store sales growth for the full year in 2008 was slightly slower than the 6.6% growth figure in the 2007 financial year. The figures for each of the four quarters shows a decline, despite relatively strong sales growth overall as the company opened 30 new supermarkets and revamped others. That was five to ten supermarkets more than its planned 15 to 25 a year.

In the Big W chain of general merchandise outlets, same store sales growth slowed to just 2.6% in the fourth quarter, compared to 4.7% for the year as a whole and 9.6% in the first quarter. Top line sales growth was 13% for the year and 12.7% for the quarter.

In the Dick Smith and Tandy consumer electronics businesses, comparable sales growth slowed to 3.8% in the fourth quarter, under the 4.4% for the year and a peak of 5.3% in the Christmas in the December quarter. Top line sales growth was mixed.