Chief executive Justin King said shopping habits were changing in reaction to the credit crunch and encouraged by its “switch and save” campaign.

At one end, sales of its budget Basics range jumped 30 per cent. At the other, Taste the Difference also rose.

He said customers were also buying more ingredients to prepare their own meals, helped by chef Jamie Oliver’s “Feed your Family for a Fiver”.

He added: “Customers want to save money but don’t want to compromise on quality.”

A trading statement showed total sales up 8.4 per cent in the 16 weeks to October 4: a rise of 4.3 per cent, excluding petrol and new stores.

King said: “We are stealing very successfully from Marks & Spencer and Waitrose and not losing at the other end.”

He said the backdrop to Christmas would be challenging but shoppers were already putting gifts and biscuits aside.