April 30 (Reuters) - Australia's Coles flagged deflation in its fresh produce and meat products, with a moderation in price rises across its broader packaged categories amid a cost-of-living crisis sparked by stubbornly high inflation.
The supermarket operator, which competes with bigger rival Woolworths, posted a 3.4% rise in third-quarter revenue on Tuesday, reflecting a jump in sales at its primary supermarkets operation helped by strong volume growth.
Inflation numbers in Australia have eased over the last quarter but still remains comparatively high. Signs of cooling inflation helped drive sales of Coles' key grocery items at its stores.
The company posted group sales of A$10.03 billion ($6.58 billion) for the quarter, with revenue from its supermarket business contributing A$9.07 billion, a 5.1% rise from a year earlier.
Australia's No.2 supermarket operator, which operates more than 800 supermarkets across the country, also indicated that volumes at its major supermarket operations remained positive during the early days of the fourth quarter.
Coles and Woolies are currently under local regulatory and political scrutiny over potential price gouging, allegations that Coles has denied.
The two firms command nearly two-thirds of total sales in the Australian supermarket sector and have thrived amid high inflation through much of last year.
The companies had been successful in passing on costs to customers, who met the price rises with residual spending power from the COVID-19 lockdowns, when the economy was estimated to have saved A$300 billion ($196.68 billion).
The supermarket chains are facing a senate and a competition regulator inquiry into how they set prices for the products they offer at a time when they have been accused of using their market dominance to raise shelf prices more than needed amid rising cost of living pressures. ($1 = 1.5237 Australian dollars) (Reporting by Rishav Chatterjee and Ayushman Ojha in Bengaluru; Editing by Anil D'Silva and Rashmi Aich)
