Tesco is, in chief executive Ken Murphy's words, seeing results at "both ends of the basket" as it has expanded access to its own-brand products while at the same time extending its premium range.

The UK's biggest supermarket group came under fire earlier this year when after research from consumer group Which? found that shoppers were spending about 10% more over the course of a year at Tesco Express when compared to larger Tesco stores or online. Significant mark-ups were found on both own-label and branded products, though broadly speaking the pricing differential was down to a scarcity of own-brand products in smaller shops.

In August Tesco announced that it was replacing more than 50 products at its Express stores with lower=priced alternatives including those from its own-brand range, which on average are more than 40% cheaper than branded products. The move has provided some relief to cash-strapped consumers who for a variety of reasons are reliant on local shops rather than larger outlets that tend to be more remote.

At the other end of the spectrum, squeezed premium shoppers are continuing to give up the likes of Waitroses and M&S in favour of Tesco. This helped drive healthy sales growth in the Tesco Finest range which in turn contributed to a 14% rise in adjusted operating profit during the six months to August 26.

READ MORE: Food security sidelined as important questions go unanswered

During that period the company launched more than 150 brand new finest products to cater to those looking to treat themselves at home rather than dining out. With this the group will be hoping to extend its current streak of 13 consecutive periods of net switching gains from its more upmarket rivals.

Noting that "people are determined" to enjoy Christmas this year, Mr Murphy suggested that UK consumers are a bit more optimistic than at this time last year. But while cost-of-living pressures are easing in the grocery aisles, they are by no means gone.

Under the inflationary circumstances Tesco's progress has been remarkable, but the real test will come at Christmas when people's desire to splash runs into the reality within their wallets. If this triggers a race to the bottom on festive pricing, profit margins will suffer.