Coles has lifted its total food and liquor sales growth for the full year of 2012 as a result of the increase in customer numbers and increased basket size, beating rival Woolworths, which had announced its results on Monday.

Wesfarmers reported the Coles division managed to increase its profits for the 2012 financial year by 6.1 per cent to $33.6 billion. For the fourth quarter, total food and liquor sales increased 4.6 per cent to $6.5 billion, while comparable store sales increased 3.0 per cent.

Managing director of Coles Ian McLeod said the comparative sales performance during the quarter was pleasing given record price deflation driven by significant fresh produce deflation and Coles’ ongoing price reinvestment.

“We have been particularly pleased with the continued strong volume growth. This confirms that our determined efforts to provide better quality, service and value are being welcomed by Australian consumers during a period of sustained pressure on household budgets,” he said.

Its home improvement and office supplies division saw similarly positive results where profits increased by 4.7 per cent to $4.6 billion. Meanwhile, Kmart profits remained flat at $4.02 billion.

However, the difficult conditions hammered down on Target where its profits dropped 1.8 per cent to $3.7 billion. In spite of this, the retailer saw improved profitability in the fourth quarter driven by Target’s mid-year toy sale.

Wesfarmers managing director Richard Goyder said the sales performance of the retail portfolio was pleasing overall and the company will continue to work hard through the tough times.

“Over the year, all of our retail businesses have worked hard to deliver an improved customer offer and genuinely better value,” he said. “This has seen a strong focus on reinvesting savings made from improved business efficiencies into lower prices for our customers. While this has added to price deflation during the year, the strategy has been rewarded through significant growth in customer numbers and units sold.”