Updated

Supermarket giant Coles has posted strong growth in the March quarter despite its fierce discounting war with Woolworths.

Coles’ food and liquor sales rose 5.4 per cent to $7.1 billion during the three months to March 29.

Growth in comparable sales, which strip out the effects of store openings and closures, was 3.8 per cent – a slowdown on the four per cent rise recorded in the previous three months.

Coles’s parent company Wesfarmers also reported a 11.8 per cent lift in total sales for its Bunnings home improvement chain, while comparable sales rose 9.4 per cent.

Its Kmart business also lifted comparable sales by 6.3 per cent, while Officeworks recorded a nine per cent increase.

However department store Target’s comparable sales slipped 3.2 per cent.

Morningstar analyst, Gareth James, says overall Wesfarmers had met expectations.

“Coles and Bunnings are the key drivers of the business – they make up more than three quarters of the business – and they are both doing well,” he said.

“The sales results are solid and there’s nothing to be concerned about.”

OptionsXpress market analyst, Ben Le Brun, said Coles had performed well despite being locked in a intense discounting war with Woolworths.

“It’s dealing with a lot of competition and some very heavy discounting, but continues to put out positive like for like sales numbers,” he said.

“This is probably pleasing the market.”

Shares in Wesfarmers fell in morning trade, but recovered to be six cents higher at $43.21 by 1221 AEST.

AAP