The supermarket is pledging to offer prices 10% below its rivals. By extending its price gap from eight to 10% Asda claims it will have “the lowest supermarket prices in the country”.

The 10% cheaper pledge will be incorporated into the Asda Price Guarantee, which launched in April 2010. It allows customers to check the price of their shopping online and receive a voucher, plus a penny for the difference if Asda is not the cheapest supermarket.

Asda says that more than 7,000 items eligible for the higher VAT rate will fall under the price match guarantee. Shoppers will now receive the difference back if Asda is not 10% cheaper than its rivals.

Asda has also pledged to roll back the price on 3,000 products in January.

Asda is launching a television and print advertising campaign on Friday (7 January) to communicate the new price commitment.

Andy Clarke, CEO of Asda, says: “At Asda, our customers place their trust in us to always have the lowest prices.

“The Asda Price Guarantee cuts through all the phoney claims and headline numbers, and shows when it comes to saving people money, we mean business this year.”

The Asda Price Guarantee is powered by independent online price-checking website Mysupermarket.co.uk and compares the price of more than 15,000 branded and own label products between Sainsbury’s, Tesco, Morrisons, Waitrose and Asda, includes promotional items.

Asda has been criticised for having a single minded focus on price and has recently relaunched its own brand ranges in an effort to improve the quality perception of its food.

Rival supermarket Morrisons launched a price crunch campaign in a bid to cancel out the effects of the VAT rise.