Asda chief executive Andy Bond has confessed to fears that Sainsbury could retake second place in the grocery retail market.

He said he believed Asda’s growth would not get back on track until the middle of 2007 and that Sainsbury could regain second place early in the New Year. “We have bottomed out and Sainsbury is back up the ski slope. We have been neck and neck for a long time and they may overtake us.”

He also confirmed that Asda aimed to open up smaller format stores to keep it ahead on market share.

Bond admitted his thoughts in an interview with the Financial Times.

Separately, Asda plans to call for longer Sunday opening hours in England and Wales this week, potentially creating 7,500 new jobs.

The government is considering changing the law to allow shops larger than 3,000 square feet to open longer. But shop workers union Usdaw, faith groups and independent retailers are resisting the move.

The issue is to be decided in the New Year.