SYDNEY, AAP – Supermarket giant Woolworths has posted a rise in first quarter sales despite supply and staffing issues linked to coronavirus lockdowns in NSW and Victoria.

Sales for the first three months of the 2021/22 financial year rose 7.8 per cent on a continuing operations basis to $16.1 billion, compared to the same period in 2020/21.

“Q1 F22 has arguably been the most challenging COVID quarter for our business, with the Delta variant causing major disruptions to our supply chain and stores,” CEO Brad Banducci said on Wednesday.

More than 22,000 Woolworths staff had to isolate and more than 1500 stores became exposure sites following the COVID-19 outbreaks in NSW and Victoria.

But sales still increased, mainly for food which accounted for $12 billion of the total, as more people obeyed stay-at-home rules.

Woolworths noted average prices dipped in the quarter by 0.9 per cent, with price deflation across all major categories except for meat and tobacco.

And while transaction numbers fell, this was more than offset by customers buying more goods per shop.

The news was not so good for the BIG W general merchandise chain, where sales slumped by 17.5 per cent to $920 million, due to store closures and trading restrictions.

“In October to date, sales have slowed in Australian Food as NSW lockdown restrictions eased,” Mr Banducci said in a statement.

BIG W sales are improving and Woolworths is banking on an uplift in shopping activity over the Christmas trading period.

“While the outlook remains uncertain, and there are likely to be challenges in the weeks ahead, we are excited about helping our customers celebrate a much-needed festive season in an inspirational, safe and enjoyable way,” Mr Banducci said.

Eligible Woolworths staff are being rewarded with an ex-gratia payment of $2,500, plus superannuation, for their efforts during the pandemic.

Woolworths will host an online annual general meeting for shareholders from 2pm on Wednesday.