Premier Foods, Britain's biggest food manufacturer, is braced for a "very fierce Christmas" as the fall-out from the recession finally hits home.

Consumers had defied expectations last Christmas by refusing to trade down from branded goods to own-label, but rising unemployment had prompted fresh fears that shoppers would not be able to afford a "very merry Christmas" this year, said the Hovis and Mr Kipling maker.

"Last year we expected the first fall-out of the recession. That didn't quite happen and therefore we expect it this year," said Carine San Juan, Premier Foods head of category for savoury. "It's going to be a very fierce Christmas and I think the retailers are going to be very aggressive. The numbers in terms of the economy are quite gloomy we're expecting 10% unemployment this Christmas and so from that perspective I think there is a level of unknown with regard to this year."

In response to the economic situation, Premier would focus on its core brands such as Bisto and Mr Kipling rather than introducing "exotic" NPD this season, said San Juan.

New for Christmas 2009 are limited-edition Mr Kipling Rum & Raisin Slices, a Lyons Family Mince Pie (rsp: £1.49 each) and boxes of Cadbury Bites in orange and mint, produced under licence.

Its Bisto Best gravy range has been revamped and expanded with a seasonal turkey-flavoured variant, and the packaging for Robertson's mincemeat has been updated to appeal to scratch cooks.

"People want a traditional Christmas," San Juan said. "Therefore it's a time to have something new, but not massively exotic, things like Bisto Best with a hint of thyme. What we're doing is sticking to what we know best and what we know consumers want out of our brands.

"People will have more financial constraints than last year," she added. "But in terms of how people will react, will they say I want to cheer myself up or decide to be thrifty and frugal? We don't know."