Coles has closed the gap with its larger supermarket rival Woolworths in the first two months of the year, posting better than expected sales and profits amid intense political scrutiny over the rising price of fresh food and groceries.

Sales at its supermarkets, the second-largest chain in the country, have grown 4.9 per cent since the start of the year. Woolworths last week told investors that sales in its Australian food division rose just 1.5 per cent in the seven weeks since the end of 2023.