By Jonathan Davies

Asda has suffered a huge blow in its attempts to keep up with its rival after reporting a big fall in sales.

The Wal Mart-owned supermarket saw like-for-like sales, which exclude new stores, fall 4.7% in the 11 weeks to the end of June.

To emphasise how much of a drop this is, under normal circumstances a supermarket would consider a 1% decline to be a disaster.

Asda chief executive Andy Clarke said the results were "disappointing, but a short-term picture".

The UK supermarket is currently embroiled in a price war with its main competitors - Tesco, Sainsbury's and Morrisons - and smaller supermarkets like Aldi, Lidl and Waitrose which are growing more and more popular all the time.

Asda has announced plans to cut costs by as much as £1 billion, while investing £250 million in its stores.