The Leeds-based grocer said it has ‘dropped and locked’ the price of over 100 family favourites and will lock the price down until the end of the year.
The move comes after Asda’s Pulse of the Nation survey found that nine in ten consumers are concerned about inflationary pressures on their budgets and 87 per cent are worried that grocery prices will increase this year.
Asda’s latest Income Tracker recorded its biggest ever drop in disposable income in March. The tracker showed that the nation’s lowest income families had 74 per cent less disposable income in March compared to the same time last year.
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.”
The Bradford-based supermarket said it is launching one of its biggest price cuts in recent years by reducing prices on over 500 products and introducing new and improved multi-saves.
David Potts, chief executive of Morrisons, said: “We know that our customers are under real financial pressure at the moment and we want to play our part in helping them when it comes to the cost of grocery shopping.
“These price cuts will have a noticeable and long term impact on our customers' budgets and demonstrate our commitment to offering them the best possible value.”
Asda will also increase the pay of 120,000 of its hourly paid shop floor staff to £10.10 per hour from July.
“We’re also proud to be investing in increasing the pay for our hardworking store colleagues and continuing to support the communities we are part of,” Mr Issa said.
The increase in hourly rate to £10.10 per hour from July will give Asda staff an additional 60p on top of the National Living Wage.
It is supported by a 10 per cent colleague discount in stores and online and additional supplement for colleagues in London stores.
Staff also have the opportunity to achieve a bonus of up to £400 at the end of the year.
The move to increase the pay of staff has been welcomed by the GMB union.
Nadine Houghton, national officer at GMB, said: “It is fantastic news that people working in Asda stores will have more money in their pockets. It is what they deserve and urgently needed with the rising cost of living.
“GMB members in stores across the country have been campaigning hard to get Asda bosses to deliver better pay. We're glad they have listened.
“Retail workers, predominantly women, face the reality of living with low pay every day. Employers everywhere need to step up and properly reward these key workers who keep our high streets running.”