Asda has reported a slump in first-quarter sales against strong like-for-like comparables as the cost-of-living crunch begins to hit consumers.

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Asda’s like-for-like sales fell 9.2% in the three months to March 31

The grocery giant reported that its like-for-like sales fell 9.2% in the three months to March 31, 2022, compared with what Asda called an “exceptional period” in the first quarter of 2021 when the UK was in its third national lockdown. 

Food sales for the period were down 7%, while clothing sales dropped 19.3% and general merchandise sales slumped 23.7%.

Asda said that during the period “households were squeezed by the removal of Ofgem’s price cap, resulting in gas price inflation of 95% and electricity prices rising by 53% in April”.

With rising inflation beginning to hit food prices during the period as well, Asda’s Income Tracker noted that household disposable income fell to an average of £205 per week – the lowest figure since October 2018.

In response, Asda said it had invested £90m into expanding its new Just Essentials value range and dropping and locking the prices of more than 100 family-favourite products until the end of the year.

During the period, Asda also announced it would increase hourly pay for shopfloor staff from £9.66 to £10.10 per hour from July of this year.

Asda co-owner Mohsin Issa said: “The latest Asda Income Tracker highlights the stark reality facing millions of families in the UK right now with household incomes more squeezed than ever.

“Asda has a strong heritage of investing in price and customers can trust us to be on their side when they need it the most. We are investing in helping our shoppers manage the challenges of the here and now, as well as progressing critical strategic initiatives including loyalty, convenience and enhancing our in-store offering, which will all deliver long-term value.”

Former Nisa chief executive Ken Towle also joined the business during the period as retail director, responsible for running the supermarket’s 640 stores.