(Reuters) - Australian grocer Coles Group Ltd ( CLEGF ) reported a 3% drop in its first-half profit on Thursday as strong sales growth at its Supermarket business, on the back of holiday shopping, was offset by a rise in financing costs related to its leases.

The Supermarket unit, which generates around 90% of Coles' revenue, reported first-half sales revenue growth of 4.3% to A$20.63 billion ($13.00 billion), helped by holiday shopping of cheap, discounted products.

"We saw strong volume growth across the portfolio, particularly over the Christmas period," the retailer said.

The country's second-largest grocer reported net profit after tax from continuing operations of A$576 million for the six months ended December 31, compared with A$594 million it posted a year ago.

That was in line with a Visible Alpha consensus estimate of A$574.1 million.

Coles declared an interim dividend of 37 Australian cents per share, as compared with 36 Australian cents apiece distributed a year ago.

Separately, Coles also announced its Chairman James Graham would retire from the board on April 30, and will be replaced by Peter Allen, a former chief executive officer at shopping malls operator Scentre Group.

($1 = 1.5873 Australian dollars)