MELBOURNE, Nov 14 (Reuters) - Australia's Wesfarmers Ltd said its Coles food and liquor business was showing growth into the second quarter and price deflation was easing.
"We have been happy with the start to the financial year which Coles has made, with underlying volume growth in the food and liquor businesses continuing to be strong," Chief Executive Richard Goyder told shareholders on Wednesday.
Goyder noted Wesfarmers food and liquor's like-for-like sales growth of 3.7 percent in the first quarter, while Coles Express fuel volume grew 0.4 percent.
"Growth in these businesses has also continued into the second quarter of this year," he said at the company's annual shareholders' meeting.
"While Coles continues to experience price deflation ... it is lower than that experienced in the first quarter," he said.
The retail-to-coal company's food-and-liquor price deflation was 3.2 percent in the first quarter, driven by a price war as Coles competes with Woolworths.
Both chains, which control over 70 percent of the grocery market, have slashed the cost of basic items such as food, milk and meat to win foot traffic.
Coles, which has had food and liquor price deflation for 12 of the last 13 quarters, said last month a rise in fresh produce prices would slow price deflation through the course of the year. (Reporting by Miranda Maxwell; Editing by Muralikumar Anantharaman)