Asda is to give its staff £26 million in bonuses, despite the supermarket suffering its worst sales for two years.
Bosses also announced plans to hire 6,000 new workers this year through store expansions, despite sales growth slowing to 4.6 per cent for the last three months of 2009, down from 5.6 per cent the previous quarter and the slowest since mid-2007.
Takings rose just 2.1 per cent in January, against Tesco's 5.1 per cent rise and a 9.5 per cent increase at Morrisons.
But Asda rewarded its staff who had completed at least six months' service with an average pay-out of £278, a figure which rose to £437 for workers in stores that beat their targets.
Chief executive Andy Bond said in a webcast from Asda’s Leeds head office that the supermarket had gone "too promotional" last year in its attempts beat Tesco and Sainsbury's and described special offers at rival grocers as "weapons of mass distraction".
The company said it would not get "sucked in" to tactical price-cutting this year and would concentrate on its traditional values, preferring to concentrate on widespread low prices rather than price promotions.
Fear are growing that Asda is to increase pressure on its supply base, with 1,700 of its suppliers told the retailer would “do whatever it takes to grow ahead of the market” at a recent conference.
It is also unlikely to sit comfortably with suppliers or supermarket rivals that Asda reportedly asked them to curtail funding to promotions at rival outlets.
Asda said it would harness owner Wal-Mart’s strength in future but made the announcement as Wal-Mart announced that like-for-like sales in its US stores were 1.6 per cent lower during the last quarter.
Wal-Mart’s recent purchase of International Produce is expected to allow Asda to sell grapes, melons and peaches for less - something likely to spark further concern from critics sceptical about the retailer’s aggressive fruit pricing tactics.
Asda also said it planned to open 10 stores, including three smaller shops, despite previously saying it was not interested in this format, and extend 10 others this year, thus creating 6,000 jobs.
Bond said: "I think this recession is different. There isn't going to be a rebound or return to how things were before. Families want to lead a richer life but they want to spend less money."
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