News: WOW UPDATE 1-Australia's Woolworths posts surge in supermarket sales on stockpiling

(Adds details on April performance, background, expected performance of hotel business)

April 30 (Reuters) - Woolworths Group Ltd (WOW) posted a jump in third-quarter supermarket sales on Thursday amid a surge in stockpiling due to the virus outbreak, but said growth rates were now moderating and warned of additional costs in the current quarter.

The coronavirus pandemic and subsequent shutdown to arrest its spread stoked fears of shortages of essential items and triggered a buying frenzy, leading to a sharp spike in March retail sales in Australia.

The country's largest supermarket chain said sales at its supermarkets division, its biggest money earner, rose 11.3% to A$11.17 billion from A$10.03 billion a year earlier.

Comparable sales at the business grew to 10.3%, compared with an Easter-adjusted figure of 4.2% growth last year. The figure lagged behind Coles Group Ltd (COL) , whose same-store sales growth surged to a record 13.1% for the same business.

However, Woolworths said while sales growth has continued in April, growth rates moderated relative to March. Food sales growth in the first three weeks of April was in the mid-single digits and drinks sales were back at pre-COVID-19 levels.

"The rate of sales growth for the remainder of the financial year is very difficult to predict at this stage," the company said.

Incremental costs related to the hiring of about 22,000 new staff to handle added demand and enforce social distancing were expected to be in the range of A$220 million to A$275 million in the fourth quarter, excluding its hotels business.

At the company's hotel business, which has been closed since March 23 since social curbs were put in place, Woolworths expects the unit to make a loss before interest and tax of A$30 million to A$35 million per month, including March, while they remain closed.