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Asda pledges £73m to keep prices low

Asda said it 'dropped and locked' the price of over 100 family favourites until the end of 2022. Photo: Tolga Akmen/AFP via Getty

Asda has announced on Monday it will invest £73m ($93m) to help UK consumers and staff weather the cost of living crisis as inflation puts the biggest squeeze on household budgets.

The grocer said it "dropped and locked" the price of over 100 family favourites until the end of 2022. Popular products included in the measure include fresh fruit and vegetables, fresh meat, tea bags, rice and cheddar cheese.

"We know that household budgets are being squeezed by an increasing cost of living and we are committed to doing everything we can to support our customers, colleagues and communities in these exceptionally tough times," said co-owner of Asda Mohsin Issa.

"We're standing side by side with the families and communities who are juggling so many demands at the moment."

Meanwhile, rival supermarket Morrisons said on Monday that it would slash the price of more than 500 staple items such as eggs, beef and nappies amid the rising cost of living.

Watch: Almost nine out of 10 adults say they have seen a rise in cost of living, ONS figures show

The move comes as the grocer's Pulse of the Nation survey found nine in 10 customers were concerned about inflationary pressures to their budgets and 87% are worried that grocery prices will increase this year.

Asda also announced new budget-friendly "Just Essentials at Asda" range that will launch in May, replacing the company's existing Smart Price products. It will offer customers over 300 low price essential items as household budgets tighten.

The supermarket, bought by the Issa brothers and backers TDR Capital last year, will also increase the hourly rate of pay for shop-floor workers to £10.10 from July.

Read more: Morrisons cuts prices of over 500 products

However, Asda is not the only supermarket hiking pay for its workers.

Earlier this month, Tesco (TSCO.L) moved to increase its hourly wage for shop staff and warehouse workers by 5.8% from £9.55 to £10.10 from 24 July. The supermarket, which is one of Britain's largest private employers, said the new rate of pay is part of a £200m investment into its workers, which will also include an extension of its colleague discount allowance and new training.

Budget supermarket rivals Lidl and Aldi have also increased pay this year.

UK wages have surged at the fastest rate in 25 years as a shortage of candidates and soaring inflation is stinging companies. Meanwhile, inflation hit a 30-year high of 7% in March and is expected to reach above 8% this month.