UK supermarket Asda freezes prices of 500 products

LONDON (Reuters) -Asda, Britain’s third largest supermarket group, has frozen the prices of over 500 products until the end of August, it said on Tuesday, adding to signs that a surge in food inflation is set to abate and even reverse in the coming months.

The retailer, which trails market leader Tesco and No. 2 Sainsbury’s, said the price lock included both branded and own brand products.

Examples included cupboard essentials such as cereals, pasta and tea, as well as salads, burgers and ice cream.

Asda is owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital.

British consumers have been squeezed for more than a year by stubbornly high inflation which has outstripped pay growth.

Overall UK consumer price inflation ran at 8.7% in April, the most recent official data showed, while food and drink inflation was 19.1%, just below a 46-year high.

Grocery inflation eased slightly to 17.2% in May, industry data showed.

Food retailers have said they expect prices to rise in 2023 overall but with the rate of inflation declining through the year.

They have recently reduced the prices of some items which have seen the biggest rises, such as milk, butter, bread, pasta and vegetable oil.

On Monday, upmarket grocer Waitrose reduced the price of more than 200 products.

(Reporting by James Davey; editing by Sarah Young)