JP Morgan expects a sharply divided performance across European food retail stocks in 2026, echoing the stock-specific dynamics seen this year, with UK-listed names continuing to lead.
“2025 proved to be stock pickers’ territory,” wrote analyst Borja Olcese, noting the strong year-to-date gains in Tesco PLC (LSE:TSCO) (up 23%), J Sainsbury PLC (LSE:SBRY) (up 18%) and Portugal’s Jerónimo Martins (up 10%).
All three have extended their outperformance from 2023–24, aided by pricing strategies that successfully balanced inflationary pressures with competitiveness.
By contrast, B&M European Value Retail SA (LSE:BME) shares have fallen 54% as the company undergoes a margin reset aimed at restoring its market position. JP Morgan expects the divergence to persist into next year.
The bank has four overweight ratings in the sector, Jerónimo Martins, Tesco, Sainsbury’s and Greggs PLC (LSE:GRG), and four underweights: Ahold Delhaize, Carrefour, B&M, and Colruyt.
These calls are backed by what the bank describes as “high conviction deltas versus consensus” across much of its coverage.
JP Morgan’s positioning reflects continued preference for food retailers with strong pricing power, operational execution and visible earnings momentum, while remaining cautious on peers facing structural or margin-related headwinds.