欧洲食品零售：杂货销售追踪 - 通胀持续上升；JMT & AD Q2/H1-25 预览

We update our grocery tracker with the latest May (April for US and Brazil) data, to look atmarket sales, volume and pricing movements in the key grocery markets for our Europeanfood retailers.Key conclusions:1) Food inflation is persisting & ticking upwards, particularly in certain Europeanmarkets (the UK, Poland, the Netherlands and Belgium), whilst pricing is flat in Franceand Portugal is out of deflationary territory. The US is delivering LSD pricing, and Brazil isexperiencing sustained MsD inflation. We expect inflation to continue to tick up across mostmarkets in H2-2025.2) Volumes are starting to tick up across some European markets, such as theNetherlands, Belgium and Poland who have finally come out of negative growth territory,pointing to early indications of improving consumer sentiment (albeit being too early to calla full recovery). Meanwhile, France and Portugal continue to see strength in demand, with4-5% volume growth. On the other side of the pond, the US seems reasonably consistenton a 2-year basis in volumes, whilst Brazil demand is muted in the face of a higher pricingenvironme3) Poland looks to be on the brink of a recovery with volumes finally turning positiveE(+2%) in the latest data. As the comp sequentially softens and macro headwinds tail off, wethink this is the first greenshoot of an improving Polish food retail landscape, and easingconsumer cautionfelling furthergrowth.However,we would remaincautious until therearefurther more robust indicators of Poland turning the tide on previous challenges, especiallyaswelooktoseehowconsumerrespondtoinflationtickingup,aswellasthesofteningofthe price war.4) The UK is still reasonably soft, with volumes sequentially declining from -1% inJanuary to -4% in May, whilst the pricing environment has crept up slightly to 3%, tosupport food retail growth. We expect the overall UK food retail market growth to remainfairly muted across 2025 due to consumer caution, with volumes likely to be down c. 1-2%.There will however be some uplift from inflation, as we hold our pricing forecast flat at c.3%.Investment implications:ForAholdDelhaize,wethinkEuropewilloutperformtheUS and end up slightly ahead vs. consensus on LFLs on Europe (+7Obps) but behind onUS (-1Obps LFL). We think the US debate will continue even though we don't see majorpressure. Net net, we struggle to get excited about AD either way into Q2. For JeronimoMartins,althoughwe likethe storyoverthe next 12months,we're slightlymorecautiousvs. consensus into Q2, and we're -7Obps behind on Polish LFLs (due to less excitement overvolume acceleration) and -1Obps behind on margins.es,analystcertificationsandotherwww.bernsteinresearch.com Next catalysts: CA Q2-25 results on 24th July; JMT H1-25 results on 1st Aug; AD Q2-25results on 6th AugustBERNSTEIN SOCIETE CENERALE CROUPN BERNSTEIN TICKER TABLETickerRatingCA.FPMOLDJMT.PL0OLDSBRY.LNMAD.NAMOLDTSCO.LN0OCDO.LNuEDMPRICE TARGET CHANGE /ESTIMATE CHANGE IN BOLDJMT.PL estimate is Reported EPS; JMT.PL, AD.NA valuation is Reported P/E (x); OCDO.LN base year is 2023;Source: Bloomberg, Bernstein estimates and analysis.INVESTMENT IMPLICATIONSWe rate Tesco (TP: f4.40) and Jeronimo Martins (TP: 29) Outperform; Ahold Delhaize (TP: 32), Sainsbury's (TP: f3.20) andCarrefour (TP: 15) Market-Perform; and Ocado (TP: 2.40) Underperform.We increase our Jeronimo Martins target price due to rolling forward our estimates and the knock on impact of updating ourmodel on future estimates. We hold our multiples the same.We update our models for Ahold Delhaize and Jeronimo Martins for Q2 results. We update Carrefour to reflect FX.EUROPEANFOOD RETAIL BERNSTEIN|SOCIETE CENERALE CROUP DETAILSMethodology: We build our bottom-up market sales trackers using monthly data from respective government websites, which isaggregated by retailer based on expected sales mix to guide our sales forecasts. The volume and price forecasts for each marketare based on comp-out scenarios where wemake assumptions on volume/price vs.2019 and calculate the impliedmonthlymetrics, which then gives market sales value when taken together.The UK market continues to face soft demand, with volumes in decline for 2025 so far (apart from April, which was supportedby the timing of Easter) and the latest May data posting -4% decline, despite soft comps. The UK consumer remains cautiousand we would look for signs pointing to sentiment turning a corner, although are not overly optimistic of the consumerlandscape changing significantly over the next few months. Our comp-our forecast suggests volumes will remain dampenedwith c. 1-2% declines. The pricing environment is reasonable and is propping up the overall market growth, with inflation at c.3%, which we expect to remain stable at this level for the rest of the year.France has seen fairly volatile demand with volumes ranging between -1% and 4% (excluding the months impacted by Easter),Brazil's grocery market has been propped up by inflation, which has remained aroun