UBS has cut share price forecasts for a number of major Australian retailers as the cost of living crisis hits shoppers from all angles.

Shares in Harvey Norman, JB Hi-FI, Super Retail, and Premier Investments are all predicted to be trading at a lower price in a year’s time, according to the broker, who forecasts a “significant slowdown’’ across all retail.

“The longstanding challenges for the Australian consumer, ­notably higher cost of living as per recent UBS research, have now materialised, with spending slowing and the prospect of a significant slowdown in FY24 across many retail categories,’’ the broker says in a note to clients.

“In mid-23 we feared such a slowdown, but it was delayed due to labour market strength (which remains for now) and accumulated savings (now exhausted).’’

UBS has downgraded its ratings on Premier Investments — who owns Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti, and Super Retail (Supercheap Auto, rebel, BCF and Macpac) from neutral to sell. JB Hi-Fi remains a neutral, but UBS has revised its 12-month price target to $45, down from $47.50.

Harvey Norman was already a ‘sell’, according to the broker, due to “an increased intensity from JB Hi-Fi not to let a sale go in this more challenging environment’’.

“Looking forward, the consumer is reducing spending in aggregate and when they do spend they are trading down by price point in apparel and general merchandise, trading down by price point to private label in food, and from out of home to in home (albeit still early days),” UBS said.

“In addition to avoiding big ticket retailers, we also avoid retailers that sell to middle Australia or that have been beneficiaries of a more exuberant consumer during Covid,’’ UBS says.

This is good news for the likes of Wesfarmers, who owns Bunnings, Kmart, and Target, being rated a buy, with its 12-month price target remaining the same.