Good post Henrietta. Surprise - there are reasons why cheap food is cheap! Supermarkets do sell their premium ranges, which probably contain less horsemeat, but here I find much of what you pay goes towards the fancy packaging.
Regarding other items - e.g. soup - possibly our existing supermarket, the Co-op, may be more expensive than Asda/Tesco for branded items, but their own brand products seem fine in quality and price, often with genuine multi-buy savings. Also, as the T.V. programme showed, there are big differences in prices between large and small stores in the same chain. What category will an Asda store be? It will probably be "large" until the other shops have gone out of business, then it will revert to "small" pricing - that's WalMart's U.S. business model.
Consumers are of course free to choose the quality of their food, and on that basis I would like the smaller shops - butchers, veg shops, fish stall, deli - to stay open, so I can continue to buy locally sourced good quality produce. My concern is that a new supermarket may, depending on location, shift the shopping centre away from the existing businesses causing closures and loss of choice. It's not nimbyism, but I do want certain things to stay as they are.