Australia's biggest grocery chain posted an 8.8 per cent rise in first half sales yesterday.
The results contrast with the sales performance of arch-rival Coles.
Woolworths' chief executive Michael Luscombe said it was a pleasing result in the challenging environment and expects sales, excluding petrol, to continue growing in the upper single digits.
"Barring dramatic unforeseen circumstances, our plan will be to try and replicate what we did in the first half in the second half," he said.
But Mr Luscombe acknowledged factors such as inflation, petrol prices, interest rates, unemployment and consumer confidence were "very difficult" to predict.
Woolworths reported sales of $26.1 billion for the half, with a 10 per cent jump at department store Big W.
The Woolworths food and liquor division posted a 7.1 per cent rise in comparable store sales for the quarter ending January 4.
By comparison, Coles reported 3.8 per cent store-on-store sales growth for the December quarter.
Woolworths' shares rose on the news, closing up 61 at $26.81.
Mr Luscombe said there was "no doubt" the Federal Government's $10.4 billion stimulus package had impacted positively on the result.
"We're basically a staples business in food and liquor and basic general merchandise. It really hit home with us," he said.
"From the working family point of view we clearly saw that it worked for them."
Mr Luscombe said January had brought a strong start to the year, "very much in the vein of our experience in the latter part of quarter two".
Subject to uncertainty about factors such as inflation, petrol prices, interest rates and unemployment, Mr Luscombe expects sales to grow.
"Petrol aside, we'd anticipate that our businesses as a total will continue in pretty much the same vein as we've had in the first half."
Mr Luscombe attributed this confidence to "the fact that we made it through the last quarter where others stumbled".
"But our plans continue to be implemented well by the teams at store level, and our customer base clearly is showing confidence in our ability to deliver value on a consistent basis. Our good start to January is good evidence that it's not just about Christmas."
Credit Suisse retail analyst Grant Saligari said the strong result, particularly for food and liquor, and Big W, reflected both the underlying strength of Woolworths' business and "consumer switching" amid a tightening in discretionary spending.
"More people (are) eating at home and so you see food and liquor sales up, and probably some more value-conscious purchasing which helps Big W," he said. "I think you also saw during the period the effects of the stimulus package support both of those businesses."
Woolworths' supermarkets in New Zealand fared worse than the Australian stores, with sales down 1.2 per cent when converted into Australian dollars.
Woolworths will announce its half-year profit on February 27.
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