Asda has unveiled its biggest Christmas price cuts of £150 million as it steps up its price war with rival Tesco.

The UK’s second biggest supermarket will introduce 2,500 price roll-backs on festive food, George clothing, toys, gifts and electricals goods. It will sell a Christmas pudding for 98p and the price of a dozen mince pies will fall to just£1.

Asda chief executive Andy Bond said: “Our research shows that the family budget is being stretched to the limit. That’s why we invested£150 million in our biggest ever set of festive price cuts.”

According to economic research organisation CEBR, UK consumers will spend£11.8 billion this Christmas, an increase of£383 million on last year.

Meanwhile, Asda parent Wal-Mart revealed yesterday that it will reduce the amount of retail space it opens significantly in its 2008 financial year, although it will increase the space it opens overseas.

Wal-Mart said it will open 195 of its large Supercenters in the US this year, but next year this will slow to 170.

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