'North is much harder hit by credit crunch than South'

Asda has has revealed that itscustomers in the north are proving more sensitive to the credit crunch than those in the south.

The retail director of the Wal-Mart-owned grocer, Andy Clarke, said sales at Asda stores in the south were out-stripping those in the north, although sales in Wales were holding up.

"You can see a difference between the north east and south east, and that is about confidence. If you are in the north east you are probably more aware of Northern Rock," he said.

Mr Clarke said Asda had stepped up its promotions that target the rising number of people eating at homesince the credit crunch began, and is launching or relaunching products for this market, as are other grocers such as Sainsbury's and Morrisons. "We are certainly seeing some of that trend in home eating and drinking," he said.

And this year Asda has increased the number of free shuttle bus services it provides to customers travelling to its out-of-town stores to cover now about 25 per cent of its stores, as a move to help customers save money they might have spent on petrol.

Meanwhile, Peter Marks, The Co-operative Group chief executive, said that that retailer was likewise benefiting from more customers eating at home, as the group delivered a sharp uplift in pre-tax profits.

For the 28 weeks to 26 July, The Co-operative Group posted a 60.5 per cent increase in pre-tax profits to £197.6m, driven by a strong performance at its food division and its merger last summer with United Co-operatives – which brought more outlets in the north of England. The two businesses have been integrated ahead of target, Marks said. Food division sales were up 43.5 per cent at £2.4 bn.