With the shelves now full of seasonal product, how will the supermarkets do over Christmas 2012?

Well, at an aggregate level, we are a little more positive about the consumer context going into this Christmas compared with the last couple of years. The secondary data is better but it is not consistently good.

While we see the Asda Income Tracker on an upward trend, indicating a little more cash in shoppers’ pockets, and more positive reports from the ONS Retail Sales and the CBI Distributive Trades surveys, the GfK NOP consumer confidence data is not indicating a strong follow through this winter. Also, headwinds remain from the macro situation such as the ongoing Eurozone fiasco to further increases in domestic home heating costs.

” Waitrose has good momentum from its space and is in the groove”

Within these contexts, we believe the supermarkets are reasonably well set to capture the few extra pounds in circulation and, indeed, we feel that Britons put ever more store on enjoying themselves at Christmas. The ‘affordable treat’ could be particularly evident this year, perhaps making for a decent mix for the trade.

We believe the supermarket winner will be Waitrose, which has good momentum from space and is in the groove. Its parent John Lewis should outperform too Aldi & Lidl should also be in Champions League positions.

Of the big four, Sainsbury’s should continue to outperform, gaining a larger proportion of its customers’ spend, and we see Asda having a good steady time, particularly benefiting from the challenges at Morrisons. M&S is also expected to be in the pack.

Tesco had a terrible time last year, but with new management, updated ranges, a new ad agency, and vouchers and Clubcard mailshots in tow (lots of margin investment), we do not expect it to be outmanoeuvred this time around.

That said, we would be surprised if Tesco emerged as a demonstrable winner as much still remains to be done for it to be where CEO Philip Clarke aspires a md-table position is expected.

At the bottom end, we believe Morrisons will struggle to turn its recent poor momentum around ahead of Christmas Day and so it will prop up the rest, alongside The Co-op and Iceland.

Dr Clive Black is head of research at Shore Capital Stockbrokers