Shoppers are splitting into "two nations" in terms of buying behaviour, according to Kantar WorldPanel communications director Ed Garner.
"Discounters are growing but so is the top end - both are ahead of the market," he told the Onion & Carrot Conference. "But discounters are still only six per cent of the UK market, compared to 40 per cent in Germany. Meanwhile, Waitrose continues to show strong growth."
For mainstream retailers, the start of the downturn in 2008 brought a 50 per cent rise in economy own labels, but this was partly reversed in 2009 and 2010 as retailers pushed premium own labels instead.
"Low price is becoming a less of a differentiator and consumers are no longer trading down to the same extent," he said. "Retailers see it as devaluing their brand."
Fresh produce accounts for more than 14 per cent of the food shopping market, which has proved reassuringly resilient, he added. "Internet shopping is still growing, but cooling off. People will still go to brick and mortar stores."
Organic produce - Message downplayed
"I think organic has been mishandled and it still hasn't got back on its feet," according to Ed Garner. "Morrisons and Asda have got out of it. Duchy produce no longer says 'organic'. Yeo Valley, Rachel's and Green & Black all downplay it, although it is still part of the message."
Organic onions account for just 3.8 per cent of the onion market "and that's getting smaller", he said. Yet 23 per cent of the garlic market is organic, he added. "It has a strong appeal to a small number of people."