Investment plan

Asda slashes prices and raises hourly pay in £73m investment plan

Asda has revealed plans to invest more than £73m to support customers and staff through the cost of living crisis over the next year.

The supermarket group said it was cutting the price of more than 100 popular items, including tea bags, rice and cheddar cheese, for the year as part of the measures.

He added that the investment means shop workers will see their hourly rate rise to £10.10 from July.

The decisions come a week after the company announced it would scrap its smart pricing range and replace it with new Just Essentials by Asda products, which it said would include a wider range of products.

Asda, which was bought by the Issa brothers and backers TDR Capital last year, has become the latest supermarket to lower prices on some items as households come under increased financial pressure.

Earlier on Monday, rival Morrisons said it would cut the price of around 500 items, including eggs, beef and nappies, amid the rising cost of living.

Leeds-based Asda said its own research found nine in 10 consumers worried about inflationary pressures on their budget as customers’ disposable incomes plunged.

He said products covered by the ‘discontinued and locked’ price commitment would see an average reduction of 12%, including a 25% drop in the price of a bag of Asda Easy Cook rice to 75p.

It comes as retailers reported a 3.3% rise in food inflation last month, which is expected to rise further.

The group has also confirmed that it will raise its rate of pay to £10.10 an hour from July, which is 60p above the national living wage.

It comes after Tesco raised basic pay to £10.10 per hour earlier this month, while other supermarket groups also raised wages.

Mohsin Issa, co-owner of Asda, said: “We know that household budgets are being squeezed by the rising cost of living and we are committed to doing all we can to support our customers, colleagues and communities by these exceptionally difficult times.

“We stand with the families and communities who are juggling so many demands right now.

“We are taking unprecedented steps to give families additional stability and certainty in their weekly purchases by lowering and locking in more than 100 prices through the end of the year.

“We are also proud to invest in increasing the wages of our hard-working store colleagues and to continue to support the communities we are part of.”