A new survey into how consumers might spend their money this Christmas has thrown up results “weaker than expected” said JP Morgan, which published the report.
Specifically, the investment bank was most wary over prospects for Sainsbury's in food and Marks and Spencer in general retail.
The US bank found nearly 70% of respondents planning to spend less on clothing this year compared to last with nearly half of customers cutting back on food, although it noted consumers trading down in gifts should support supermarkets.
For general retail, “the results support a cautious stance,” said JPMorgan, with an unhelpful read for M&S, it added.
In food, JPMorgan sees Sainsbury’s as vulnerable, while B&M is a way to “play the down trading theme.”
Christmas is a critical period for retailers, with roughly 40% of profits generated at listed grocers and 30% for general retailers.
However, this year sees a “two-way pull between post-Covid normalisation and a well-documented budget pressure due to increased cost of living.”
Recent data from NielsenIQ predicted that consumers will spend £34bn at supermarkets over the festive period, a 4% jump on last year, said Nielsen.
However, most of this growth will be driven by rising prices, with actual sales volumes expected to fall by 4%.