Families can look forward to cheaper grocery bills, with supermarket giant Coles expecting fruit and vegetable prices to ease soon.
Official figures released last week showed fresh fruit prices spiked by nearly 15 per cent between July and late September, pushing inflation higher.
Richard Goyder, the boss of Coles' owner Wesfarmers, says tougher growing conditions and cooler weather had pushed up fresh produce prices but he's expecting a turnaround as supplies begin to increase.
"We think it'll probably move, in the not so distant future, to a surplus in fruit and vegetables and that'll lower prices," he told reporters on Thursday.
His comments came as Wesfarmers unveiled a solid lift in first quarter sales for its Coles supermarkets and Bunnings hardware chains.
Coles food and liquor sales rose 5.8 per cent to $7.3 billion in the September quarter, compared to the same period a year ago.
Comparable sales, which strip out the effects of store openings and closures, rose 4.3 per cent.
But its fuel and convenience store business, Coles Express, recorded a 2.3 per cent fall in total sales.
Wesfarmers says lower fuel prices during the quarter more than offset reduced fuel discounts after Coles and rival Woolworths agreed to the competition watchdog's undertaking that they stop fuel-saving offers funded by other parts of their businesses.
Elsewhere, Bunnings sales rose by a solid 11 per cent, while Officeworks also continued to shine and Kmart's sales grew modestly.
Target continues to be the troubled child of the group, with total sales falling 4.6 per cent.
Mr Goyder was reluctant to say when he expected a turnaround.
"It's frustrating to not see the sales' turnaround in Target based on all the work we have done in the business," he said.
"We went through the same sort of pain with Kmart.
"We see it (better sales) some weeks, we get slightly euphoric and then the following week puts us back into place. It's taking a bit of time."
IG Markets market strategist Evan Lucas said Target's poor track record raises the question as to why Wesfarmers' perseveres with the retail chain.
"Target doesn't fit their current strategy and it's not delivering the kind of returns they expect," he said.
"However, they are a very well run company and 75 per cent of their business is food and liquor, which is why Wesfarmers is doing so well."
Wesfarmers shares closed 57 cents firmer, or 1.31 per cent, at $43.92 on Thursday.
WESFARMERS SALES POWER AHEAD
* Total first quarter retail sales - $13.554b
* Coles food & liquor up 5.8pct to $7.3b
* Coles convenience down 2.3pct to $1.9b
* Home Improvement up 11pct to $2.2b
* Office Supplies up 8.0pct to $403m
* Kmart up 2.9pct to $998m
* Target down 4.6pct to $753m
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