On Tuesday the UK's second-largest supermarket chain announced that it would cut 1,400 jobs, including 200 at its head office, in an effort to keep afloat in a competitive retail market. The Wal-Mart-owned chain said 1,200 jobs would be cut in stores, while 200 management jobs at its Leeds and Lutterworth centres would be scrapped. This represents 1 percent of the total amount of Asda employess.

Chief executive Andy Bond said in March: "While our sales have slowed in recent months as the economy's tightened, Asda is no retail straggler. But I'm simply not satisfied with this year's average performance - our natural home is outperformance and today's changes put in place the teams that will reignite our business over the next 12-18 months."

Rivals like Tesco and J.Sainsbury have been challenging Asda as they have lowered their prices to improve their competitive edge. In June market researchers TNS revealed that Tesco had achieved more than 30 per cent market share in the month of May, spearheading the group. If Bond's prediction is right, Sainsbury will soon reclaim its number two slot from Asda due to the latter's poor trading.

"Non-food sales have generally been down pretty badly this year," said one analyst on Tuesday. "We think that 30 per cent of Asda sales come from non-food items. Asda has also been hit by the fact that it has tried to squeeze non-food into the same retail space rather than opening new space."

Further to its job slashes, Asda announced the return of Andy Clarke to the company as retail director after a three-year gap working for Matalan and Iceland.