Asda chairman Andy Bond has cautioned that grocers face “two years of muted growth” as shoppers continue to tighten their belts in the tough climate.

Bond said: “Shoppers are facing severe headwinds such as the VAT rise and grocers are already suffering low food inflation and higher petrol prices.”

He said grocers will have to focus increasingly on the customer in order to present them with a proposition that will create loyalty in the difficult climate.

Bond, who is working on international schemes understood to include India and Russia for Asda parent Walmart, is also “working on some entrepreneurial smaller projects”.

He would not disclose details but added: “I’m doing some smaller things I have wanted to do for a while, and the retail and consumer goods area is the one I know best.”

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