The nation's biggest supermarket group revealed the trend during its first-quarter sales results on Wednesday, while warning that consumers are struggling in the economic climate.
Woolworths, which has more than 1000 grocery stores, posted a 4.7 per cent rise in overall sales to $19.4 billion for the three months to October 4, which was in line with expectations.
Most of the growth was driven by its home market, where Australian food sales rose by almost seven per cent to $14.8 billion from the same period last year, after shoppers took advantage of an increase in the number of low-priced products to more than a thousand and an extended in-store rewards program.
Cheap beef mince was a standout in the fresh food sector, alongside similar value-added proteins, bakery products like specialty breads and long-life products such as UHT milk, yoghurt and cheese, many of which were Woolworths' brands.
Customers were under "real pressure", chief executive Amanda Bardwell told a briefing on Wednesday.
"The amount of pressure on young families, particularly, and families more broadly is increasing ... and that's why I think it's important that we continue to do everything we can to invest in value,'' she said.
"We're going to have to work increasingly hard, just given where customers are right now."
Australian households face cost-of-living pressures on multiple fronts, as prices rise across the board and after four interest rate hikes so far in 2026, against a backdrop of softer domestic and global economic growth.
And there might be another rate increase as soon as next Tuesday, after inflation increased by 1.3 per cent in the September quarter and 4.3 per cent over the year.
Most of the consumer price index growth was driven by the higher cost of housing, energy, transport and food, the statistics bureau reported on Wednesday.
The average family with a mortgage spends about 10 per cent of household income on groceries each year, Woolworths estimates.
But while the grocery giant increased first quarter sales, it also recorded a 0.7 per cent fall in average prices, excluding tobacco, which was partly buffered by higher meat prices.
With just under two months to go before Christmas, Ms Bardwell promised shoppers that Woolworths, which is valued at $49.9 billion and about $17 billion more than its major rival Coles, would do its best to make the holiday season "special".
Last week, it began selling Christmas table half leg hams at $8 per kilogram, the same price as in 2014.
"When we look at how we're positioned for the (December) quarter, we feel like we've got a really great plan," Ms Bardwell said.
"It really now all comes down to how customers respond and what happens in terms of interest rates and fuel."
Woolworths' first-quarter sales were also helped by an Ooshies collectibles promotion which ran for one month and ended in August, offering shoppers a squishy rubber figure of Disney, Marvel and Star Wars characters for each $30 spent.
In August, Woolworths reported a 2025/26 annual net profit of $1.1 billion, up 18 per cent on the year before.
The retailer's shares were 0.5 per cent higher at $41.23 after noon on Wednesday.
Coles will report its first-quarter sales on Friday. It has already flagged a likely three per cent rise in overall sales, which would be better than the prior's year's outcome of $11 billion.
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