By Stuart Condie

SYDNEY--Australian supermarket chain Coles Ltd. said its third-quarter sales fell by 5.4% from a year earlier when sales were inflated by pandemic-driven hoarding.

The company on Wednesday reported sales of 8.76 billion Australian dollars ($6.80 billion), down 5.4% on a comparable basis.

Supermarket sales slipped by 6.4% on the same basis to A$7.72 billion, while sales at its smaller liquor and convenience units rose by 2.1% and 6.3%, respectively.

The chain was cycling an abnormally strong prior corresponding period, when sales rose by 13% as consumers hoarded household staples early in the pandemic. Many then switched their shopping away from major outlets to local stores.

With Covid community transmission largely contained in Australia, Coles said consumers had begun to return to shopping centers and central city stores at the end of the January-March quarter.

Supermarkets sales, adjusted for the timing of Australia and New Zealand's April 25 armed forces commemoration day, were up by about 4.0% from a year earlier for the first four weeks of 4Q.

Coles said that Sunday was again its busiest day of the week, with increased visit numbers lifting sales of impulse, convenience and take-out food products.

Coles said it expected both capital and operating expenditure investments to continue for the remainder of the year. Covid-related costs were at the low end of its previous guidance, it said.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

04-27-21 1947ET