Consumers want "a treat or cheap deal"

Following recent research indicating some British consumers are taking steps to cut spending amid the credit crunch while others continue to buy luxuries, the Grocer magazine has said mid-range products are faring badly at present.

Inflation expert for the magazine Alex Beckett said "shoppers seem to want either a treat or a cheap deal" and are avoiding mid-priced supermarket items.

Some shoppers are edging towards value products to cut costs while higher-priced frozen ready meals from Marks and Spencer and Sainsbury`s are also doing well, Mr Beckett said.

He added the price rises are due to growing populations in India and China which means prices are not expected to drop but rises may slow "as the world readjusts".

According to Defra, the lowest-income families in the UK have been hit hardest by food price rises. The poorest ten per cent of the country spend 15 per cent of their income on food, twice as much as the richest ten per cent.