Asda has reported its first sales drop in four years in a performance branded “disappointing” by chairman Andy Bond.
The supermarket said conditions will "remain tough for some time", reporting a like-for-like sales fall 0.3 per cent in the first quarter of the year.
It represents a drop for the first time since 2006, with the easing of food inflation and stiff retail competition putting the brakes on growth.
Bond said: "The market has slowed down significantly since the turn of the year, and I expect conditions to remain tough for some time."
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.
Asda said 15,600 staff would share an estimated £47 million when a three-year share saving scheme matured in June.
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.
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."
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