Growth at Asda slowed from 7.2% to 5.6% in the three months to 30 September - but remains ahead of its supermarket rivals'.

In a quarterly update, chief finance officer Judith McKenna said the slowdown was largely due to a drop-off in food price inflation.

However, Asda continues to outpace its big-four rivals. In recent updates, Tesco reported 3.1% underlying sales growth, while Sainsbury’s earlier this week unveiled a 5.4% rise in sales.

McKenna said Asda planned to invest £150m in price promotions for the festive season.

“Having gone through what they've gone through over the past year people are reluctant to spend cash,” she said, warning of a difficult Christmas for UK retailers. “They would rather pay off debt.”

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Tesco regains initiative with strong September (14 October 2009)

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