Bernstein Picks Top European Food Retailers Amid Inflation Pressures

Investing.com — Bernstein has identified select European food retailers as attractive investment opportunities over the next 6-12 months, citing inflation dynamics that favor companies with strong private label offerings and competitive pricing.

According to the firm, food retailers pass on the majority of producer inflation directly to consumers as they cannot absorb the pressures. However, consumers typically avoid some of the passed-on inflation by trading down to discounters or private label products.

Bernstein backs retailers with strong private label presence and price competitiveness versus in-market leaders.

1. Tesco – Bernstein views Tesco as the most defensive way to invest in the inflation theme within European food retail. The firm highlights the company’s strong private label offerings and price competitiveness as key advantages in the current environment where consumers are seeking value amid rising prices.

In a recent update, Tesco PLC reported robust results for the second half of fiscal year 2026, noting a 6% increase in headline earnings per share and a 12% rise in free cash flow.

2. Jeronimo Martins – The Portuguese retailer provides the most attractive inflection story at trough multiple, according to Bernstein.

The firm notes the company’s strong private label presence and competitive pricing position it well as consumers trade down to more affordable options during inflationary periods.

3. Marks and Spencer – Bernstein expects Marks and Spencer to be resilient and benefit from the current environment.

The firm points to the retailer’s transformation story and competitive positioning as factors that should help it navigate consumer behavior shifts during inflation.

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