By Martinne Geller

NEW YORK (Reuters) - The weak U.S. economy continues to shape consumers' supermarket choices, helping the makers of bargain-priced foods like Spam and Hormel chili, and hurting those like Campbell Soup Co <CPB.N>, which has not discounted as deeply as some rivals.

Hormel Foods Corp <HRL.N> reported a higher-than-expected quarterly profit on Tuesday and forecast 2011 earnings above Wall Street estimates, helped by strong sales of its namesake chili, hash and pepperoni, as well as Compleats microwave meals and Spam.

"The weak consumer continues to gravitate toward Hormel's mainstream, value-added portfolio," said Janney Capital Markets analyst Jonathan Feeney. "Hormel was able to realize decent volume concomitant with hefty price increases ... to offset substantial cost inflation."

However, Hormel said it expected to raise prices on some products by 3 percent to 4 percent.

According to government data released on Tuesday, the U.S. economy grew faster than previously estimated in the third quarter, but a slump in sales of previously owned homes in October indicated the recovery remains too anemic to reduce high unemployment.

Meanwhile Campbell, which analysts say should be performing better as the jobless rate remains high and the weather cools, posted a lower-than-expected profit as discounts for rival brands outpaced its deep promotions.

In Tuesday afternoon trading, Campbell shares were down 2.0 percent at $34.14, while Hormel rose 3.2 percent to $49.47.

Sales of Campbell's condensed soups used for cooking rose 7 percent. But sales of other condensed soups and ready-to-serve soups were weak.

The world's biggest soup company, which competes with General Mills Inc's <GIS.N> Progresso brand, had warned earlier this month of weaker-than-expected quarterly results and cut its fiscal-year forecast.

Campbell Chief Executive Officer Douglas Conant said consumers were changing how they shop. The soup category has suffered from too much discounting and too little innovation, with consumers buying a lot of the products on sale and then stockpiling them.

"We've got to get out of the pantry, and we have to increase usage," said Conant, who will be replaced next year. "We're not going to do that through price promotion that puts more in the pantry."

Sales rose 24 percent in Hormel's grocery products business and 26 percent in its refrigerated foods unit, fueled by its namesake party trays and pepperoni and Natural Choice deli meats.

Hormel forecast fiscal-year earnings above Wall Street estimates, despite expected pressure from higher raw material and grain costs.

HORMEL SALES BEAT ESTIMATES

The results from Campbell and Hormel come one day after top meat producer Tyson Foods Inc <TSN.N> forecast fiscal 2011 sales above Wall Street estimates, helped by better export markets and higher prices for its prepared foods.

Hormel reported a profit of 90 cents per share for the fourth quarter ended on October 31, up from 77 cents a year earlier and above the analysts' average estimate of 79 cents, according to Thomson Reuters I/B/E/S.

Sales jumped 23 percent to $2.06 billion, topping analysts' estimates of $1.87 billion.

While Hormel had "a solid quarter," Morningstar analyst Erin Swanson said it faces challenges from higher prices for grain and hogs. She also noted that the latest quarter had one more week than the year-earlier period and a larger-than-usual one-time hedging gain.

Hormel expects fiscal 2011 earnings per share of $3.10 to $3.20. Analysts on average had forecast $3.05.

Campbell's profit fell to 82 cents per share in the first quarter ended on October 31 from 87 cents a year earlier. Analysts were expecting 83 cents.

Sales slipped 1.4 percent to $2.17 billion, missing analysts' expectations of $2.2 billion.

Campbell said margin pressures were likely to persist through the current second quarter and that it planned to focus more on advertising and brand-building, instead of promotions, in the second half of the year.

The company, which has endured several weak soup seasons in a row, has discussed increasing its focus on the units that sell products like its V8 juices and Pepperidge Farm Goldfish crackers.

Campbell is likely to be invited to bid on Britain's biggest snack food company, United Biscuits, now that its private equity owners are opening up talks to new suitors, according to people familiar with the matter.

For fiscal 2011, Campbell forecast growth of 2 percent to 4 percent in earnings per share and 1 percent to 3 percent for sales, including an estimated 1 percentage point benefit from currency exchange rates.

(Additional reporting by Jon Lentz, editing by Dave Zimmerman and Lisa Von Ahn)