Asda will launch a new value range in UK supermarkets, amid the cost of living crisis, as the grocer saw growth slow down due to customers returning to pre-pandemic habits.

The supermarket firm, which was bought by the Issa brothers and backers TDR Capital last year, said it will axe its Smart Price range and replace it with new Just Essentials by Asda products.

It said the new budget range will comprise 300 products, a 50% increase on the current Smart Price range.

Just Essentials products will initially arrive in stores from May and be rolled out to replace Smart Price over the summer.

Asda said it has designed the new range with consideration for customer concerns over the cost of living crisis.

It comes a week after the Office for National Statistics said inflation jumped to a 30-year-high of 6.2% in February, with food inflation at 5.3%.

Mohsin Issa, co-owner of Asda, said: “We understand that customers are increasingly worried about the cost of living and want help to keep their grocery bills in check, whilst still being able to buy healthy and nutritious food for their families.

“Our new Just Essentials range has been specifically designed with this in mind, combing our lowest prices with a much larger and more diverse range of great value products to meet all household needs.”

The shake-up of its product range came as Asda revealed revenues of £20.4 billion in 2021, representing a 0.6% increase in like-for-like sales, excluding fuel.

However, the retailer highlighted that like-for-like sales declined by 2.9% in the three months to December compared with the same period a year earlier, as customers returned to pubs and restaurants.

Online sales also declined by 5% in 2021 against the previous year, as the return to the office saw a reduction in home deliveries.

Asda said operating profits soared over the year, rising by 42% to £693.1 million due to a reduction in Covid-related costs.

Mr Issa added: “When we bought Asda we were clear that we wanted to grow this great business and our ambition is for Asda to regain its position as the UK’s second-largest grocery retailer.

“We are pleased with the progress made in the six months since we officially took over the business and are confident we can achieve this long-term ambition by providing customers with exceptional value wherever and however they choose to shop with us.”

The Issa brothers have continued to lead the supermarket group following their £6.8 billion takeover, with the firm’s already lengthy pursuit of a new chief executive officer yet to find a replacement for Roger Burnley.