WOOLWORTHS has been overtaken by Coles in the supermarket wars, hurt by the wildly popular Little Shop promotion and Coles' move to delay charging for reusable bags.

Woolworths this morning reported its Australian food sales lifted 1.9 per cent to $9.87 billion for the 14 weeks to September.

That is its slowest growth rate in two years and down from 4.9 per cent in the same period a year ago.

Like-for-like sales, which strip out the impact of stores opening and closing, were up 1.9 per cent.

Coles last month reported its sales had surged 5.8 per cent to $7.66 billion for the 13 weeks to September 23.

Like-for-like sales were up a bumper 5.1 per cent.

 

Woolworths food sales is at its slowest growth rate in two years. Picture: AAP
Woolworths food sales is at its slowest growth rate in two years. Picture: AAP

 

Coles was boosted by the Little Shop collectables promotion and its decision to keep issuing free reusable bags after Woolworths had started charging for them.

New Coles chief Steven Cain last month said Little Shop "probably has been the most successful short-term campaign that the business has ever run".

But he warned the supermarket's sales growth was likely to slow now that is was over.

"Australian Food had a challenging start to the quarter with sales impacted by our customers' and team's adjustment to the removal of single-use plastic bags as well as the impact of a competitor continuity program," Woolworths said in a statement this morning.

 

Coles was boosted by its decision to keep issuing free reusable bags. Picture: AAP
Coles was boosted by its decision to keep issuing free reusable bags. Picture: AAP

 

The supermarket giant said sales momentum had picked up in September and October.

Total sales across the Woolworths group for the three months to September 30 were up 1.9 per cent to $14.85 billion, with Endeavour Drinks' sales - including BWS and Dan Murphy's - up 3 per cent to $2.1 billion, and Big W sales rose 1.3 per cent to $902 million.

Woolworths has invested more than $1.5 billion in lowering prices, revamping stores, upgrading its online shopping options and opening an automated distribution centre over the past two and a half years.

The investment has seen it regain its mojo and consistently beat Coles in sales growth over the past two years.

The sales surge at Coles comes just as it gets ready to start its new life as an independent company listed on the stock exchange.

The Little Shop promotion of involved Coles issuing 30 miniature replicas of popular products, including Tim Tams, washing powder and jars of Vegemite.

 

- With AAP