Sales continue to improve for Woolworths after it announced total group sales reached $14.1 billion, an increase of 3.8 per cent on the previous year in its third quarter sales.

Sales improvements were seen in its supermarket, bottle shop, Big W, hardware, petrol and its hotels.

CEO Grant O’Brien said: “This has been achieved in a continuing tight consumer market.”

According to O’Brien, two key factors that impacted on the third quarter sales income were accelerating deflation and the unseasonably cold and wet period, such as NSW, which experienced their wettest months in more than 50 years.

“However we were pleased with continued growth in customer numbers, market share and units sold and the growing momentum of key initiatives. Whilst the quarter saw an improving sales trend, we continue to remain cautious about the sales outlook for the fourth quarter, particularly given consumer and business uncertainty about the impact of the carbon tax and interest rates,” he said.

Its supermarket division reported third quarter sales increased by 2.9 per cent on the previous year to $9.4 billion while comparable store sales were flat, despite growth in customer numbers and units sold.

The standard shelf price movement index for the quarter was ‐1.2 per cent compared to 3 per cent during the same period last year. This was impacted by produce prices, which were in significant deflation in the third quarter as a result of supply improving and the cycling of high prices from the prior year following the natural disasters

Tjeerd Jegen, managing director of Australian Supermarkets and Petrol said produce deflation was close to 20 per cent for the quarter with many key lines like bananas, pumpkins, watermelons and tomatoes affected.

Meanwhile, price deflation averaged 5 per cent due to the high Australian dollar during the quarter for Big W, which saw sales increase only 1.4 per cent to $931 million for the quarter. Its strongest sales were recorded in toys & sporting, books and cosmetics while the cooler weather affected sales in seasonal areas such as outdoor, aquatic and cooling.

While still relatively new to the home improvement sector, the company recorded a successful 29.4 per cent increase to $211 million as a result of sales from the first ten Masters stores, three of which opened during the third quarter.

“Trading in our new Masters stores continues to deliver positive results. Feedback from customers is overwhelmingly positive and we are excited about our future pipeline of stores and the opportunity to make the Masters offer available to more Australians,” Don Stallings, chief executive officer home improvement, said.

The company also emphasised it continues to see the rollout of its multi- option offer both online and mobile.