Asda has revealed plans to invest more than £73 million to support customers and staff during the cost-of-living crisis over the next year.

The supermarket group said it is reducing the price of over 100 popular items, including tea bags, rice and cheddar cheese, for the year as part of the measures.

It added that the investment means shop floor workers will see their hourly rate increase to £10.10 from July.

The moves come a week after the company said it will axe its Smart Price range and replace it with new Just Essentials by Asda products, which it said comprises a broader range of products.

Zuber and Mohsin Issa
Zuber (left) and Mohsin Issa completed a £6.8 billion takeover of Asda last year (EG/PA)

Asda, which was bought by the Issa brothers and backers TDR Capital last year, has become the latest supermarket to push down prices of some items as households come under increased financial pressure.

Earlier on Monday, rival Morrisons said it would cut the price of around 500 items including eggs, beef and nappies amid the rising cost of living.

Leeds-based Asda said its own research found that nine in 10 consumers are concerned about inflationary pressures to their budgets while the disposable incomes of customers dived.

It said products covered by the “dropped and locked” price pledge will see an average reduction of 12%, including a 25% drop in the price of a bag of Asda easy cook rice to 75p.

It comes as retailers reported a 3.3% increase in food inflation last month, which is expected to rise further.

The group also confirmed it will increase its pay rate to £10.10 per hour from July, 60p more than the National Living Wage.

It comes after Tesco increased basic pay to £10.10 per hour earlier this month while other supermarket groups have also increased wages.

Mohsin Issa, co-owner of Asda, said: “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.

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

“We’re taking unprecedented action to give families some additional stability and certainty in their weekly shopping by lowering and locking over 100 prices until the end of the year.

“We’re also proud to be investing in increasing the pay for our hard-working store colleagues and continuing to support the communities we are part of.”