Woolworths has increased its sales by 2.2 per cent across the range of its retail businesses.

The supermarket giant's key Australian food and liquor division increased its sales by 4.8 per cent in the 14-week period to December 31 when compared to the same period a year earlier.

In total, the domestic food and liquor division pulled in revenue of $10.35 billion, while the entire supermarket division (including petrol) made $13.2 billion across Australia and New Zealand, still comfortably ahead of Coles's sales of $9.9 billion in the quarter.

However, sales growth of 2.5 per cent in the food and liquor division, when new stores are excluded, was less than the 3.3 per cent reported by rival Coles yesterday.

Woolworths managing director Grant O'Brien says it was a difficult quarter with a strong finish.

"We had a terrific December, with record sales for the week leading up to Christmas and a record Christmas Eve," he said.

"With cost of living pressures top of mind for customers, it's true to say that the Christmas customer remained a cautious one and we had to work hard in the lead-up to Christmas to deliver the results."

Petrol sales from Woolworths outlets fell 0.9 per cent, with a 3.2 per cent decline in the quantity of fuel sold partly made up for by higher prices.

The retail giant's Big W discount department store chain continued to struggle, reporting 1.6 per cent sales growth to $1.35 billion for the quarter.

The biggest jump in sales came from Woolworths's expanding home improvement business, which saw 48.2 per cent sales growth to $332 million, as the company opened 10 new stores in the last six months.

The company's hotels business also saw a rapid rise in revenue, up 21.4 per cent in the quarter compared to the same period a year earlier.

Woolworths says growth was driven by the acquisition of another 29 hotels in New South Wales, two in Queensland and one in Western Australia, as well as gambling regulation changes in Victoria.

However, Woolworths's total sales were dragged down by the sale of its Dick Smith Electronics business in Australia and its Indian electronics business.

Excluding the fall in sales resulting from exiting these businesses, Woolworths would have had a 4.9 per cent rise in sales across its various retail outlets to $15.3 billion.

The company's managing director, Grant O'Brien, says it is a "solid result".

"This solid first half result is a reflection of the sharpened focus on our core businesses and better meeting our customers' needs," he noted in the report.

"The growth our businesses are achieving while pursuing a transformational path for Woolworths is pleasing. However, there is

still a great deal more to do."

Investors have given a cool reception to the results, with Woolworths off 0.6 per cent to $31.46 by 10:52am (AEDT) in a broader market that was relatively flat.