WOOLWORTHS Ltd, Australia's biggest retailer, yesterday increased first-quarter revenue 9.6 percent as its supermarkets extended market-share gains from Wesfarmers Ltd, and its Big W discount department stores attracted shoppers.

Sales rose to A$12.8 billion (US$9 billion) in the 14 weeks ended October 5 from A$11.7 billion a year earlier, Sydney-based Woolworths said in a statement. The increase beat the 8.7 percent estimate of Craig Woolford, an analyst at Citigroup Inc in Sydney, who rates the stock "hold."

Bloomberg News reported that Chief Executive Officer Michael Luscombe is preparing for a consumer slowdown by accelerating the rollout of a new store format and upgrading loyalty programs to maintain more than three years of market share gains from second-ranked Wesfarmers.

Australian consumer confidence plunged this month by the most in more than two years amid slumping equity markets and signs the economy is slowing.

"Woolworths' first-quarter sales result has confirmed that the key food and liquor Australia division continues to outperform," Citigroup's Woolford said in a note to clients. "The division has -benefited from refurbishments and has won customers."

Woolworths maintained its forecast for annual sales to rise in the "upper single digits." The 9.6 percent pace of first-quarter sales growth compares to a 7.5 percent increase in the fourth-quarter ended June.

Woolworths shares rose 7 cents to A$28.07 at the close of trading in Sydney, paring this year's decline to 17 percent.

Sales from Australian supermarkets rose 8.3 percent to A$8.3 billion, with revenue from stores open at least a year gaining 6 percent.

Wesfarmers, which owns the Coles chain, last week posted first-quarter Australian supermarket growth of 2.6 percent with revenue from stores open at least a year -rising 1.3 percent.