* Q2 operating profit falls 2.5 pct to 79.9 bln yen
* Cuts annual operating profit outlook to 308 bln yen
* Shares up over 10 pct this year, beating 4 pct Nikkei rise
By James Topham
TOKYO, Oct 4 (Reuters) - Seven & I Holdings Co's quarterly operating profit fell 2.5 percent as weaker sales at its supermarkets offset growth from its convenience stores, leading Japan's top general retailer to trim its annual outlook.
A decline in demand after last year's post-quake sales bounce and intense competition over food prices at large-scale stores is set to weigh on the profits of Japan's major general retailers as they release financial results.
The owner of 7-Eleven, the world's largest convenience store chain, reported on Thursday an operating profit of 79.9 billion yen ($1.02 billion) between June and August.
Seven & I, which competes at home with Aeon Co and Seiyu, the Japan arm of Wal-Mart Stores, also cut its forecast operating profit for the year to February 2013 to 308 billion yen from its earlier estimate of 315 billion yen.
That compares with the average estimate of 310.9 billion yen in a poll of 18 analysts by Thomson Reuters I/B/E/S for Japan's largest general retailer in terms of market capitalization.
Cooler summer temperatures in June and July caused softer sales of seasonal goods like cold beverages and ice cream, while demand for food and other essentials fell from last year at its Ito-Yokado stores and York-Benimaru supermarkets following the mammoth earthquake and tsunami.
Japanese monthly retail sales overall rose 1.8 percent in August, government data showed last week, after falling 0.7 percent in July and ticking up 0.2 percent for June.
But the near future is cloudy for Japanese retailers as service-sector sentiment deteriorates, with strength in domestic demand looks to fade, according to Japan's central bank's quarterly Tankan issued earlier this week.
Japan's top supermarket operator Aeon and major convenience store chain FamilyMart Co are both scheduled to issue financial results next week.
On Wednesday, rival Lawson Inc posted a quarterly operating profit of 20.6 billion yen, a 4.5 percent year-on-year rise, as a broader customer base, including women and senior citizens, and expanded offering of higher margin private brand goods lifted profits for the convenience store operator.
Seven & I shares have risen nearly 10 percent in the year to date, higher than a 4 percent gain in the benchmark Nikkei average. Before the earnings announcement, shares of Seven & I ended 1.7 percent higher, against the Nikkei's 0.9 percent gain.