Australia-Supermarket giant increase sales.

AUSTRALIA-SUPERMARKET GIANT INCREASE SALES.

Sales at Coles supermarkets grew 7.6 per cent to $5.3 billion last quarter, with the company’s owner Wesfarmers saying the momentum gained in the lead-up to Christmas has been maintained.

Once this year’s late Easter, which fell in the second quarter rather than the first quarter, is taken into account, sales grew 8.3pc.

On a comparable stores basis, the sales grew 6pc, less than the 7.9pc comparable sales growth reported by major rival Woolworths last week.

"We are seeing improvement in many aspects of the business (Coles) but a lot remains to be done," chief executive Richard Goyder told analysts this morning.

The company said the comparable store sales growth compared to growth of about 4pc in the December quarter, and less than 2pc a quarter before that.

Wesfarmers said "phase 1" of its turnaround of the grocery retailing giant was "on track", almost a year after new supermarkets chief executive Ian McLeod took on the job.

In Target stores, sales during the March quarter rose 6.1pc, with underlying same-store sales growing 2.9pc in the 14 weeks to April 13, which includes Easter trading.

The company said sales in those 283 stores had been "volatile and inconsistent", but this was partly offset by the government stimulus package.

At the Kmart chain, sales were described by the company as "poor" in January and February, but picked up in March, which the company linked to government stimulus measures.

Comparable store sales for the quarter grew just 0.1pc in the 14 weeks to April 13, and the company expects trading performance at the Kmart stores to "remain soft".

The company’s Bunnings Hardware chain posted 11.1pc comparable store sales growth, up from 9.9pc a quarter earlier and 4.9pc a quarter before that.

Mr Goyder said it was a "really outstanding performance from Bunnings".

At Officeworks sales growth was at 5.7pc, the best quarter since the chain was acquired in the November 2007 takeover of the Coles Group.

Mr Goyder said there was "a lot of work to do, but we’re reasonably pleased with the progress".