Asda cuts prices on staple products

LONDON (Reuters) - Asda, the nation's second-biggest supermarket group, said on Thursday it was cutting prices on at least 1,000 essential items and funding the reductions by using less energy, fewer carrier bags and cutting waste.

The firm, owned by U.S. group Wal-Mart, the world's biggest retailer, said price cuts included selling 200 health and beauty products like shampoo and deodorant and 100 frozen food items for 1 pound each, as well as three-packs of selected fresh meats or bottles of wine for 10 pounds.

"2009 is going to be a very difficult year and I believe we have an obligation to help our customers through these tough times," Chief Executive Andy Bond said in a statement.

Britain's retailers are slashing prices in a bid to lure shoppers who have curbed spending amid rising unemployment, sliding house prices and fears of a deep recession.

Asda said it had saved 10 million pounds by reducing packaging, 3.2 million by using fewer carrier bags and 2.3 million by using double-deck trailers.

It declined to give a total figure for its cost savings or for the investment in lower prices.

(Reporting by Mark Potter; Editing by James Dalgleish)