With Tesco posting like-for-like sales up 3.7% for the 6 months up to August 29th and Sainsbury’s delivering like-for-like sales up 5.4% up to October 3rd, there may well be optimism in the run up the Christmas.

Current winners:
According to the figures there have been clear category winners over recent months. Tesco’s Finest premium range (especially ready meals) is back in demand (showing sales increases of 20% year on year and next week Tesco will be launching the Restaurant Collection. With Sainsbury’s also seeing an increase in its top-end ready meals, is this indicative of green shoots or an echo of often-repeated theories of consumers eating out less and instead treating themselves when they stay in?

Driving growth:
If there’s more (or less!) to uplifting sales figures than meets the eye, and if your product is not one of the few categories which appear to be doing well, you will need to work increasingly hard to ensure your brand is selling and justifying the shelf space it occupies. Just look at the organics sector...

According to Nielsen data, year-on-year sales for organics are down 14%, and whilst recent sales across the organics range have shown signs of an increase, as per premium ranges, it has not stopped ranges being cut. With falling organics sales, Tesco has cut SKU’s by 30% year-on-year, with Asda cutting their organics range by 35% (Brand View figures from The Grocer).

However one sector’s loss will always provide opportunities for others. With organics, the beneficiary according to Asda has been local foods, where the range has been widened to reflect recent increased demand.

Customers long term expectations - A cautionary tale:
In the short term there appears to be clear winners (premium ranges - especially in ready meals) and clear losers (organics) but ensuring that your brand remains ahead of the competition in the longer term will be critical.

In figures released by IGD on 13th October, more than 54% of shoppers have said they will be more careful when spending money in the future. It is unclear yet what long-term affect the recession will have on consumers’ psyche and behaviour.

Looking to the future, IGD highlighted that by 2012, just under a third of consumers (29%) said they would shop more at discounters, compared to just 5% who said they would use discounters less frequently. From an ethical stand point, 37% expect to be buying more local and regional foods and 34% will be looking to buy food with higher animal welfare standards. 31% also expect to buy more Fairtrade.

For the organics sector, despite the current doom and gloom, 15% expect to be buying more organic foods by 2012.

It would appear that shoppers’ buying habits will reflect an air of caution but they will also to be more conscious of the purchases they make.