Sales down at Asda

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Supermarket Asda posted its first sales fall in four years today and warned that conditions would "remain tough for some time".

The UK's second biggest grocer saw like-for-like sales fall 0.3% in the first quarter of the year - dropping for the first time since 2006 - in a performance branded "disappointing" by Asda chairman Andy Bond.

Supermarkets have seen slowing sales growth as food inflation eases and rivals battle fiercely for hard-pressed shoppers, but Asda is the first of the "big four" chains to see comparative sales slip into the red.

Mr Bond said: "The market has slowed down significantly since the turn of the year, and I expect conditions to remain tough for some time."

Mr Bond has been replaced as chief executive by Andy Clarke, who first joined Asda in 1992 and has been its chief operating officer since 2007.

Despite its disappointing recent trading performance, Asda last month set out ambitions to become the clear market number two in food and the leader in non-food sales in the next five years - opening 100 supermarkets and 150 Asda Living general merchandise stores.

The firm has also invested £12 million in improvements to speed up service and reduce check-out queues to broaden its appeal.

But Mr Clarke warned that pressure on the consumer would intensify as the new Government weighs up tax rises to tackle a record deficit.

He 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."

Asda, which is owned by US giant Wal-Mart, has 374 stores in the UK and around 170,000 staff.

The group added that 15,600 Asda staff would share an estimated £47 million when a three-year share saving scheme matured in June.