Australian retailer Woolworths Ltd has recorded an increase in first-half sales, despite "ongoing headwinds" facing the retail sector.

Woolworths, Australia's largest retailer, said today (31 January) that sales, which include its general merchandise and hotel divisions, climbed 5% to A$29.72bn (US$31.67bn). Excluding petrol, sales grew by 3.7% to A$26.29bn.

Sales from the retailer's supermarket division were up by 5.6% to A$23.9bn for the six months to 1 January. Its Australian food and liquor division saw sales in the period increase by 4.3% to reach A$19.6bn, while sales from its supermarkets in New Zealand rose by 3% to NZ$2.9bn (US$2.40bn).

The retailer said it opened 25 Australian supermarkets during the half-year, bringing the total number of stores to 864.

"The first half result was solid considering the ongoing headwinds facing the retail sector, with subdued consumer confidence and significant deflation, along with the change agenda we are driving through our business," said Woolworth's CEO, Grant O'Brien. "Overall customer numbers have increased, reflecting improved customer buying power through price deflation."