Asda chief executive Andy Bond said the grocer was 12.8 per cent cheaper than Argos for 50 popular products.

“I think we are well-equipped to be competitive with them. We have a great global sourcing capability,” he said.

Bond said he was encouraged by the initial results of Asda Direct, following the debut of the web site, catalogue and in-store collection desks, which launched in five stores last month.

The venture is Asda’s latest general merchandise push and complements the 16-strong chain of Asda Living non-food stores.

Bond said he was committed to installing Asda Direct desks in more of its Living outlets and supermarkets.

“Asda Living will change the price strategy for out-of-town retailers because we are 40 per cent cheaper than our main competitors in out-of-town retail parks,” he said.

Separately, Bond said that he was encouraged by the Competition Commission’s provisional findings, but insisted: “We want [them] to make sure the remedies are aggressive on local competition.”

This week, Asda reported “low single-digit” sales growth for the three months to October 31. Operating income was below the same 2006 period.