Australian retailer Woolworths Ltd said price cuts and poor weather had an effect on sales in the third quarter of its financial year.

The supermarket giant today (20 April) announced a 3.8% increase in total group sales to A$14.1bn (US$14.57bn) in the 13 weeks to 1 April. Excluding fuel, sales rose 3.3%.

Sales from continuing operations, which exclude the electronics unit Woolworths plans to sell, grew 3.9% to A$13.7bn.

However, same-store sales at its Australian food and liquor operations were, however, flat in the quarter.

Woolworths said the rate at which prices fell accelerated in the quarter. Deflation was 4.4% in the third quarter, compared to 4.1% in the previous three-month period.

Sales also hit by the impact of weather in the quarter and a year earlier. Cooler weather during the quarter across the Eastern States of Australia also affected sales, particularly for items such as ice cream and deli products including salads and cold meats.

Woolworths said the business was also lapping last year’s Queensland floods and Cyclone Yasi, which drove sales as a result of panic buying and the temporary closure of rival stores within some affected areas.

Total sales from Woolworths’ Australian food and liquor division rose 2.9% to A$9.4bn.

Sales from Woolworths’ supermarkets in New Zealand increased 2.9% to NZ$1.4bn (US$1.47bn). Comparable sales grew 2.9% in the period.

“Whilst the quarter saw an improving sales trend, we continue to remain cautious about the sales outlook for the fourth quarter, particularly given consumer and business uncertainty about the impact of the carbon tax and interest rates,” said Woolworths’ CEO Grant O’Brien.

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