Profits at supermarket operator Asda, which is owned Wal-Mart, have surpassed £1 billion for the first time despite a decline in sales and slight loss of market share.

According to recently filed annual accounts, Asda's operating profit rose 1.9 per cent to £1.01bn in 2014, helped by its drive to reduce costs.

That compares with major profit falls last year at all three of Asda's "big four" rivals in Britain, market leader Tesco, Sainsbury's and Morrisons.

They have all been hurt by a price war, as they attempt to stem the loss of shoppers to discounters Aldi and Lidl, and by commodity-led deflation.

Asda said 2014 revenue fell 0.4 per cent to £23.2bn, sales at stores open over a year decreased one per cent and UK market share dipped 0.1 percentage point to 17.1 per cent.

Asda chief executive Andy Clarke launched a five-year strategy in 2013 focused on lower prices but eschewing the money-off vouchers touted by its rivals.

The firm invested £300 million in lowering prices during 2014.

However, Asda's sales performance has deteriorated in 2015, with the firm posting like-for-like sales declines of 3.9 per cent in its first quarter and 4.7 per cent in its second quarter.

The second quarter outcome, Asda's worst performance in the 16 years it's been owned by Wal-Mart, was described by Mr Clarke as the firm's "nadir".

The most recently published industry data put Asda's UK market share at 16.7 per cent, down 0.6 percentage points year-on-year.