Almost three years ago to the day, Marks & Spencer proudly announced the acquisition of 28 former Iceland stores, to be transformed into Simply Food shops. Now, as the financial ice age closes in, Britain's favourite high street retailer is closing 25 of these 355 stand-alone food outlets, including several from that optimistic 2006 expansion.

Apart from the economic implications, there is a cultural shift at work here. Far from being no-hope inner-city sites, many are what should be prime M&S food hot spots. On the closure list is Whitley Bay, in the smartest part of Tyneside; Melton Mowbray is one of the most sought-after areas of Leicestershire. There is Biggin Hill, up-and-coming Balham - the list goes on. Even the supposedly well heeled are following the collective gut instinct about the new year and tightening their belts. This is not just a recession; this is a really serious recession.

In truth, though, the problem is not just about money; it is about bad strategy and poor timing. When Sir Stuart Rose embarked on the expansion of the stand-alone stores, the consumer seemed genuinely wedded to the idea of a higher per-calorie spend. In 2006 we were all food elitists, obsessing about organic vegetable boxes and inquiring as to the lineage of our roast chickens. High ideals indeed, for which we were prepared to pay significantly higher prices. Now, the name of the game is value, and M&S has neither the expertise nor the wherewithal to compete.

At the core, its food operation has only ever been about luxury. A trip to the M&S food hall was always the poor man's equivalent of a visit to Fortnum & Mason or Partridges: a rich selection of quality foodstuffs at premium prices. These were products to buy and savour for a special occasion - richer, riper, infinitely more recherché than the mass-produced offerings in the supermarket. It was a place to top up your basket, not to fill it.

Then came the boom and with it the so-called democratisation of luxury. Every supermarket, from Waitrose to the Co-op, created a Simply-Taste-the-Difference-Because-You're-Worth-It product line, and shoppers found that they could get a little bit of that food-hall magic at supermarket prices.

At the same time, M&S began moving in the opposite direction, pitching for a share of the general grocery market. The problem is, while people don't mind paying a little extra for an excellent curry supper and half a bottle of pink Oudinot, they're not so keen on overpriced breakfast cereal.

And therein lies the problem. At the Simply Food in an affluent London suburb yesterday, I counted 10, maybe 12 customers. A young woman I spoke to emerged with a small bag. What did she think of the food? “Delicious, a real treat.” Was she a frequent buyer? “Yes, but not for big stuff.” Meaning? “I do the bulk of my shopping at Tesco.” Indeed, the Tesco a few doors down was packed.

We must hope that Rose's strategy succeeds. After all, in the dark days that lie ahead, a world without individual fruit crumbles would be almost too awful to contemplate.

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