In the middle of a Christmas trading reporting season that was unfailingly upbeat, the Bank of England decided that interest rates needed to go up, for the third time in six months. Looking ahead at the industry's prospects, will this increase in pressure on consumers' disposable income actually impact UK supermarkets' sales and profits? Or will they be largely immune? I wouldn't expect another stellar year like 2006, but relative to the world of general retailing, food will be just fine.

Contrary to the scaremongering that surrounded the run up to this year's festive period, it proved to be successful for the retail sector as a whole. It was especially fruitful for the major supermarket chains, as like-for-like sales growth varied from a solid 3.6% at M&S to an eye-catching 6.3% at Morrisons.

We also suspect that improving waste and markdown control, plus the switch to more healthy and organic products, will mean these sales were very profitable ones. Tesco's non-food offer will have helped the market leader further.

It is indisputable that food retailers are currently keeping a closer eye on wider consumer trends than they did at any time in the past.

The stock market has always perceived the supermarket sector as "defensive": when the going gets tough in other parts of the economy, it's a safe haven, because everyone's got to eat and the downturn in food consumption is always expected to be less bad than elsewhere. But recent moves into non-food (now over 20% of Tesco's UK sales for example), plus the propensity of customers to trade up in the past 18 months, make the sector more exposed to movements in disposable income.

That said, investors certainly shouldn't jump ship, nor should managements panic. While exposure to a consumer slowdown has increased, we think the new habits that shoppers are adopting mean that things will be absolutely fine.

The move towards healthy eating is most definitely not a fad, and the increase of organic product in baskets won't turn around either. Other areas of expenditure will suffer before shoppers turn their backs on 2006's food retail trends.

Last year will go down in history as a moment when the importance of price waned and healthy and ethically sound food became the battle ground. Another 25 basis points on interest rates won't derail this at all - keep buying those food retail stocks.