Marks & Spencer has insisted the premium food bubble is not about to burst, even though interest rates and inflation appear to be on an upward curve.
Announcing like-for-like food sales growth of just 0.7% in the 13 weeks to 30 June, with total food sales up 8.5% off the back of new Simply Food openings, CEO Stuart Rose admitted higher interest rates and inflation were "unhelpful".
But he said it was bad weather and not consumers tightening their belts that had hit grocery takings.
"It's a solid set of results in what's been a strange quarter. Products such as BBQ food and soft fruits are not selling as well as they did last year, because the weather has been doom and gloom. We believe the short-term trading environment will remain very challenging, but our plans are unchanged.
"Disposable income has been cut, but by offering quality and value we can continue to outperform. It is clear that what people want now is fresh, healthy, good food."
The results had come at a time when a quarter of M&S's trading space was undergoing refurbishment, costing over £2m a week in sales, he added.
The retailer's overall like-for-like sales rose 2%.