Australian supermarket group Foodland Associated has reported a 3.5% rise in first-quarter sales, helped by strong growth in its Queensland operations.

Sales from continuing operations rose 5.3%, after stripping out its underperforming New Zealand department stores, which have recently been sold.

Foodland said total sales for the quarter to 2 November rose to A$1.55bn (US$1.11bn) from $1.5bn a year earlier. Analysts had forecast sales growth of 3.0-3.5%.

The company’s Action supermarkets performed particularly well, posting sales growth of 10.5% to $317.8m, helped by new stores and a focus on higher-margin fresh fruit, vegetables and meat.

“We are seeing a shift across our store portfolio as fresh (food) strengthens,” Foodland chief executive Trevor Coates was quoted by Reuters as saying. “That’s good because it generates bigger margins.”