Marks and Spencer Group PLC (LSE:MKS), Tesco PLC (LSE:TSCO), and Associated British Foods PLC (LSE:ABF) faced divergent outlooks as RBC warned of intensifying competition on the high street.
The brokerage reshuffled its stance across the sector, maintaining 'sector perform' ratings on M&S with a 385p target and Tesco at 485p, alongside an 'underperform' call on Primark owner ABF at 1,800p.
At the heart of the research is an escalating price war, in which Primark is sacrificing operating margins by reinvesting currency-buying gains to undercut fast-fashion disruptor Shein.
That budget rivalry is intensifying following the UK debut of Inditex brand Lefties, which has entered the market at a price point between ultra-cheap discounters and established midmarket chains.
In the midmarket arena, 'outperform'-rated Next PLC (LSE:NXT) defended its moat with a 17,000p target, while M&S grappled with clothing availability snags and sizing missteps.
Those apparel headwinds were counterbalanced by booming grocery demand, prompting the broker to raise its financial year 2027 profit-before-tax forecasts for M&S by 1%.
By contrast, the bank trimmed Tesco's earnings projections for three financial years due to sluggish supermarket volume growth and persistent competitive pressures.
In the same note, 'sector perform'-rated Halfords Group PLC (LSE:HFD) secured a target increase to 260p after strong seasonal cycling and motoring demand triggered an unscheduled profit upgrade.
Looming ahead for retailers are rising autumn freight rates and the chancellor's upcoming October budget, which could test household budgets and squeeze margins heading into winter.
