Asda sees generation of more frugal shoppers

By Mark Potter

LONDON (Reuters) - The economic downturn will give birth to a generation of shoppers focused on low prices, cutting waste and spending more time at home, the chief executive of Asda, Britain's second-biggest grocer, said on Thursday.

"This won't be an economic recession where it's a blip and then we're back to where things were," Andy Bond told a news conference, likening the change in customers' mindsets to how post-war austerity shaped the spending habits of a generation.

"It won't be everybody, but there will be a type of consumer that will be defined at this moment that will stay with us for a long time," he said.

"We are moving into an era of the frivolous being unacceptable and the frugal being cool."

Asda, which is owned by U.S. group Wal-Mart (WMT.N), the world's biggest retailer, said it was seeing big shifts in spending habits.

Consumers are cooking more food from scratch and shunning expensive ready meals, and are switching to cheaper own-brand goods where they see little difference from costlier branded alternatives, Bond said.

Sales of curry ingredients, for example, are up 40 percent on the year, while sales of some ready meals are down by a similar amount.

Shoppers are still prepared to spend money on expensive items, but largely as an alternative to going out, with sales of olives up 50 percent, balsamic vinegar up 70 percent and champagnes up 100 percent over last year, Bond said.