Supermarket chain Coles Myer has announced a first half 2006 sales increase of 4.2% at AUD$19bn (US$14bn) but blamed poor supermarket, liquor and non-food general sales for lower than expected figures.

The company said that marketing pressure in supermarkets, lack of liquor scale in the superstore market and the industry-wide trend of lower spending by customers on non-food impacted sales in an adverse way.

Coles Myer CEO John Fletcher said: “While second quarter sales were disappointing, the group remained on track to deliver full-year earnings of $769m.

“All of supermarkets’ transformational and strategic initiatives will contribute incrementally to sales and earnings over time. Our Liquor business also has in place both short and long-term initiatives to grow sales and earnings.”

Food and Liquor recorded sales growth of 3.9% for the half with same store sales up 1.5%. Coles Express group sales increased by 15.9% to $3bn for the half, reflecting higher fuel prices. Kmart reported a sales decrease of 2.6% for the half with same store sales down 5.0% in an intensely competitive second quarter for the subsidiary.