Asda, the British arm of U.S. retailer Wal-Mart Stores Inc (WMT.N), believes UK consumers are in recession, with less money to spend and fearful of losing their jobs and seeing interest rates rise.

Asda Chief Financial Officer Judith McKenna told the Reuters Consumer and Retail Summit on Tuesday the retail outlook was tough because of the squeeze on people's incomes and fear of the future.

"Do I expect it to improve anytime soon? - no I don't," she said.

McKenna said the grocery group's income tracker showed people currently had 14 pounds ($22)less in their pockets year on year. "It is a really biting effect on how people are shopping and spending....particularly in the area of discretionary spending."