The one trend in Coles' latest sales results that spells trouble for Aldi

Coles sales revenue has increased by four per cent for the March quarter, the supermarket giant reported today.

The results mirrors a strong performance shared by Woolworths earlier this week, proving both retail giants are successfully navigating the current market.

In today's announcement, Coles reported supermarket sales rose to $9.8bn for the three months until March.

Coles also reported a 7.3 per cent growth in its own brand ranges, which now account for 33.5 per cent of total sales.

These private-label products, which offer a cheaper alternative to major brands, have also seen a boost at Woolworths.

However, the aggressive expansion of own brand ranges at Coles and Woolies appears to be taking a bite out of Aldi's market share.

The bargain supermarket reported slower-than-expected sales growth earlier in the week.

"Customers are making every shop count," Coles Group CEO Leah Weckert said when presenting today's sales results.

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Cost of living pressures and a volatile fuel market due to the conflict in Iran has seen an increase in "value-seeking behaviour" by shoppers, she added.

This has included fewer visits to the supermarket, combining shopping trips with other trips to reduce petrol use, more dinners at home, and a focus on maximising loyalty points benefits through things like Coles' Flybuys program.

Coles is currently running their KitchenAid cookware promotion, where Flybuys customers can earn points to get free pots and pans at the checkout.

Weckert also reported that Coles shoppers are stocking up on pantry essentials and freezer items during larger shops.

Items customers are stocking up on include "pasta, rice, canned foods".

"Discretionary spending" items such as tobacco and liquor sales have weakened, however seasonal items such as Easter products remain steady.

When asked by nine.com.au about Easter sales and the impact of higher chocolate prices on shoppers, Weckert said shoppers still picked up items for Easter but chose cheaper brands and "smaller bunnies".

Coles e-commerce sales including online pick-up and delivery options have seen a surge of 28 per cent, accounting for 13.3 per cent in total supermarket sales.

Woolworths' e-commerce growth slowed to 11.3 per cent.

Both companies reported a sharp decline in tobacco sales due to new legislation, and Coles reported weak liquor sales.

"We know value and availability will be important to our customers over the months ahead and we are well placed to respond to this with our extensive own brand portfolio, our leading e-commerce platforms and the strength of the infrastructure and capability that sits within our supply chain," Weckert said in the ASX announcement published today ahead of presenting the results.

Red meat prices have continued to increase, Coles and Woolworths each reported.

Abundant supplies of fresh fruit and vegetables such as avocadoes has seen some deflation in fresh produce.

Both supermarkets flagged future price pressures due to the conflict in Iran.

"In recent weeks, we have seen an increase in supplier cost price increase requests and higher costs within our own operations, particularly in fuel, freight and packaging," Coles said in the statement to the ASX.

"We are actively managing these and will mitigate impacts where possible, while balancing the needs of customers and suppliers."

Woolworths also warned that surging petrol prices and rising logistics costs were beginning to eat into margins which could force the price of groceries up even further this year.

"Looking ahead, the conflict in the Middle East is creating greater uncertainty for our customers, suppliers and team at a time when cost-of-living pressures are already acute," Woolworths chief executive Amanda Bardwell said.

"While the impact on the group to date has been limited, higher fuel costs and secondary effects are likely to have an increasing inflationary impact as we move through the calendar year."

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