Asda chief executive Andy Bond warned that the downturn has changed consumer habits for the long term and retailers need to adapt to a new era of frugality.

“We are moving into an area of the frivolous being unacceptable and the frugal being cool,” said Bond. “A whole new consumer generation will come out of this.”

Bond said Asda has witnessed a shift in shopping patterns with consumers cutting back on ready meals and throwaway, gimmicky gifts in favour of frozen food, which lasts longer, and ingredients for cooking from scratch and practical gifts.

Bond criticised the flurry of discount sales in recent weeks and argued that customers are seeking “real, transparent” value. He said those retailers with a truly “authentic” low-cost model will survive.

Shoppers are still prepared to spend money on quality items such as olives, Champagne and balsamic vinegar as an alternative to going out, said Bond. He also revealed that sales of hair dye have rocketed 27 per cent as shoppers still want to dye their hair but aren’t prepared to pay hairdressers’ prices.

Bond said 2009 will be very tough for retailers but Asda was planning for a “reasonable” year.

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