* Coles Q3 food and liquor sales up 1.2 pct to A$7.6 bln
* Year to date sales up 1.9 pct
* Q3 deflation 0.5 pct (Adds deflation figures, coal sales)
SYDNEY, April 27 (Reuters) - Australia's Wesfarmers Ltd , owner of the country's No. 2 grocery chain, said third-quarter food and liquor sales rose 1.2 percent as a strategy of cutting shelf prices to win customers was offset by higher wholesale prices.
Food and liquor sales for Coles supermarkets came in at A$7.6 billion ($5.7 billion) for the three months to March 26, the mining-to-retail conglomerate said in a statement on Thursday.
No analyst forecasts were available for the quarterly result.
Coles and larger rival Woolworths Ltd have been slashing prices amid fierce competition from new bargain rivals like Germany's ALDI Inc and U.S.-listed Costco Wholesale Corp.
On Thursday, Wesfarmers, the country's biggest company by sales, said it experienced shelf price deflation of 0.5 percent in the three-month period, less than in previous quarters, because of "supply-driven fresh produce inflation".
"It is necessary that we continue to proactively invest in the customer offer throughout this period of lower growth and increased competition to ensure we maintain our market leading customer offer," Coles Managing Director John Durkan said in the statement.
For the year to date, Coles food and liquor sales, which account for about 40 percent of Wesfarmers' revenue, were up 1.9 percent. It offered no guidance for the full financial year.
It did not publish profit for Coles in the quarterly update. In February, Wesfarmers said Coles earnings fell 6.8 percent for the first half of the year.
Wesfarmers said coal sales from its Curragh mine in Queensland would hit the lower end of a guidance range between 8 and 8.5 million tonnes, owing to damage to rail lines caused by Cyclone Debbie.
$1 = 1.3373 Australian dollars Reporting by Byron Kaye and Tom Westbrook; Editing by Jacqueline Wong and Stephen Coates