By Daniel Hunter

Asda has reported a 3.9% fall in sales for the first quarter, as the supermarket price war continues.

These figures are based on the 15 weeks to 19 April and compare to the same period last year. But sales were also down 2.6% compared with the final quarter of 2014.

The supermarket described this year the 'most challenging yet'. But Chief executive Andy Clarke said he is committed to the company's five-year plan, rather than implementing a knee-jerk reaction.

Mr Clarke said: "This last quarter has been unprecedented. We have seen deflation in the market and exponential shifts in the industry... 2015 is setting itself up to be the most challenging year yet for traditional supermarkets. Customers are not yet cash-confident, preferring to save rather than spend."

Asda last year unveiled a £1 billion price cutting programme, with £300m worth coming before the start of 2015.