Australian supermarket group Woolworths has reported lower-than-expected quarterly sales, amid increased competition from its rivals.

Woolworths said its third-quarter sales increased 5.3%, failing to meet analysts’ forecasts of around 7%, reported Reuters.

Woolworths’ main rival, Coles Myer, has stepped up its competition with Woolworths with a recent push into fuel discounts. Both chains now offer discounts on fuel for consumers who spend a certain amount of money in-store.

Despite the lower-than-expected sales, Woolworths backed its forecast for a rise in fiscal 2004 net profit of up to 15%.

The retailer said sales for the 12 weeks to 4 April were A$6.48bn (US$4.73bn), compared to $6.15bn a year earlier. Third-quarter food and liquor sales rose 3.7%, an increase of 2.3% on a like-for-like basis.