Grocery and general merchandise giant Asda has claimed a “return to market outperformance” after sales and profits rose.

Walmart-owned Asda reported that like-for-like sales excluding fuel rose 1.6% in the fourth quarter, equivalent to 2.6% including VAT. Profits rose ahead of sales in the full year.

Asda also said that 800,000 consumers have compared prices using its Price Guarantee scheme following its relaunch in January and that the core Chosen By You own-label range had gone “from strength to strength” since it was introduced in September.

Asda chief executive Andy Clarke said: “I’m pleased with the progress we’ve made in the last six months. We have successfully extended our price gap to 10%, significantly improved the quality of our food across the entire store and given our cusomers even better service.”

The retailer said Chosen By You, which accounts for 80% of own-label food sales, will be extended by 2,000 products in coming weeks, including 250 “non-edible groceries”, bringing the total to 5,000.

Asda also detailed plans for a further “push on quality” in non-food with the introduction of the Elegant Living premium homeware brand. It will include bedding, bath, cooking and dining products. Goods are being jointly sourced with Walmart and the intention is to save shoppers 30% on typical high street equivalent prices.

Earlier, Asda said its staff would recieve a £26.9m bonus. Clarke said: “The colleagues are the heroes of our business. They have worked incredibly hard this year to deliver the best for our customers, taking everything from the difficult economic climate to the weather in their stride.”