Asda sees sales fall since 2006

sales over its first quarter – covering the three months to the end of March – fell by 0.3pc, excluding fuel and VAT. Over its previous quarter sales had risen by 4.6pc, highlighting just how much they have slowed.

The poor sales follow a similar slowdown at rival Wm Morrison earlier this month. The Bradford-based chain said that like-for-like sales had slowed from 6.5pc over Christmas to just 0.8pc. Last week Justin King, the chief executive of J Sainsbury, said that sales across the industry were slowing, although he gave no figures for his chain.

Commenting on the poor figures, Mr Clarke said: "Listening to customers, it's clearer than ever that the second half of this year will be challenging for them. High petrol prices, and the prospect of tax increases from the incoming government are weighing heavily on their minds. "It is our responsibility to deliver the plan we've laid out, and by doing so help lower the cost of living for our customers."

Mr Bond said: "By our own high standards, our first quarter sales were disappointing. The market has slowed down significantly since the turn of the year, and I expect conditions to remain tough for some time.

"I'm pleased to say that we're making good progress against the plans we outlined to analysts last month. Our four-pronged strategy to build sales and broaden our appeal is beginning to take shape."

He said that Asda has renewed its focus on being a so-called 'every day low price' (EDLP) retailer.

"EDLP means we've successfully reduced the number of promotions in store. The launch of the Asda price guarantee also means both our price position, and price perception has never been stronger," said Mr Bond.

Asda said yesterday that 15,600 of its existing staff will receive an estimated £47m in bonuses following the maturity of a three year sharesave scheme at parent company Wal-Mart.