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Australia’s Woolworths says first quarter sales up 3.7 percent

(Reuters) – Australian grocery chain Woolworths Ltd <WOW.AX> said on Tuesday first quarter sales rose 3.7 percent, helped by a sharp rise in food sales.

Total sales from continuing operations came in at A$14.52 billion (8.45 billion pounds)for the 14 weeks to Oct. 1, up from A$14.01 billion a year ago.

Australian food sales rose 4.9 percent on a comparable store basis, the company said in statement, as higher volumes more than offset deflation in fruit and vegetable prices.

Higher online sales also translated to sales growth Woolworths’s Australian and New Zealand food divisions, the company added.

A week earlier, rival Wesfarmers <WES.AX> reported tepid growth in its food and liquor division over the September quarter, hurt by deflation in food prices driven by a bumper vegetable-growing season.

On Tuesday Woolworths said average prices in its Australian food division fell 2.4 percent over the same period a year earlier. Excluding food and vegetables, prices declined 1.2 percent.

In New Zealand, Woolworths’ food sales grew 3.2 percent to NZ$1.6 billion ($1.10 billion), while comparable sales rose 2.7 percent for the quarter.

In August, Woolworths posted its lowest full-year underlying profit in a decade, but a jump in food sales drove the company’s stock to a two-year high after comparable store food sales growth beat Coles owner Wesfarmers’ food and liquor sales growth.

(Reporting By Rushil Dutta in Bengaluru; Editing by Chris Reese and Andrew Hay)

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