Asda chief executive Andy Bond has warned that while shoppers will spend slightly less this Christmas, the first quarter of next year will be “when things get really tough” for retailers.

Bond said: “When we look back next year at trade in November and December we will probably think that Christmas was not great but OK, and that it certainly isn’t as bad as the first quarter.”

He said that none of the concerns facing consumers, such as falling house prices, will have gone away by the first quarter of next year and shoppers won’t have a big occasion like Christmas to spend for.

“We are being prudent about next year and are not planning for huge growth,” said Bond. “It will not be a good year for retail but the best way to get through it will be to get your costs right and deliver value.”

Asda will focus on “what it does best” to ride out the storm, said Bond. It will continue to deliver on its promise of Every Day Low Prices for customers. “It will be tough at Christmas for businesses such as restaurants and pubs but slightly better for retailers. Food retailers will do reasonably well but those on the gifting side may suffer. But it won’t compare with next year,” he warned.

Bond said Asda is “outperforming” the market and last week reported third-quarter like-for-likes, excluding petrol, up 6.9 per cent. It follows a 6 per cent uplift in its second quarter and 5 per cent growth in its first quarter. Despite the tough trading environment Asda increased total sales in the “high single digits”, excluding petrol, for the quarter to September 30.

Bond said Asda is not being affected by the discount grocers, unlike some of its rivals. “In terms of cash growth we are bigger than all of the discount grocers altogether. We are taking share from the discounters,” he claimed.

Bond said: “It will be the value retailers which will do well next year, not those that just offer cheap products.”

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