New Asda supremo Andy Clarke has vowed that the supermarket will do “everything we can” to absorb next year’s rise in VAT rather than hike prices.

“I understand the very real need to help our 18 million shoppers through belt-tightening times and they have my commitment that we'll do everything we can to make sure they don't notice tax increases at the checkout,” Clarke (pictured) said.

Clarke, who took over the reins as chief executive from Andy Bond last month, made the comments in the wake of this week’s emergency Budget.

As part of a raft of measures designed to tackle the UK’s spiralling deficit, VAT will rise from 17.5% to 20% from 4 January 2011. But fears that the coalition government would slap VAT on food proved unfounded.

Clarke also said Asda – last week crowned as the UK’s cheapest supermarket for the 13th year running – would continue to reduce its operating costs in a bid to keep prices low.

Meanwhile, eight out  of 10 'Asda Mums' - the supermarket's panel of female consumers - said they will be worse off after the Budget announcement, with the VAT rise the measure most likely to hurt their family finances.

Read more
Emergency Budget: VAT up but food escapes (22 June 2010)
Emergency Budget: 'A tough Budget addressing serious issues' (22 June 2010)
Clarke confirmed as new Asda boss (11 May 2010)