Asda sales bounced back at the end of last year it had lost ground to some of its rivals.
The grocery giant, second in size only to Tesco, saw its market share slip last year.
But sales in the fourth quarter rose 1.6 per cent.
It said it had been boosted by its Chosen by You range.
Chief executive Andy Clarke said: "I'm pleased with the progress we've made in the last six months. We have successfully extended our price gap to ten per cent, significantly improved the quality of our food across the entire store, and given our customers even better service."
The sales rise means Asda staff will share a bonus pot of £26.9m, with most receiving around £350 each.
Meanwhile Asda's parent company Wal-Marrt yesterday reported that sales fell 1.8 per cent – the seventh consecutive quarterly fall.