(Reuters) -Australia's Coles Group ( CLEGF ) on Tuesday reported a rise in third-quarter revenue, as signs of cooling inflation helped drive sales of key grocery items at its stores.

The company said group sales rose 3.4% to A$10.03 billion ($6.58 billion) for the quarter, with revenue from its supermarket business contributing A$9.07 billion, a 5.1% rise from the year-earlier period.

"We have also continued to see deflation in fresh produce and meat and moderation in inflation across our broader packaged categories," Coles said.

The company, which operates more than 800 supermarkets across Australia, also indicated that volumes at its major supermarket operations remained positive during the early days of the fourth quarter.

Australia's No.2 supermarket operator is currently under local regulatory and political scrutiny over potential price gouging, allegations that the company has denied.

($1 = 1.5237 Australian dollars)

(Reporting by Rishav Chatterjee and Ayushman Ojha in Bengaluru; Editing by Anil D'Silva)