(Bloomberg) -- The coming holiday season could be as good as it gets for strongly performing UK retail stocks, according to Deutsche Bank AG.

“Christmas trading is likely to be robust, in our view, but there is a risk this represents the last hurrah of post-pandemic spending recovery,” analyst Adam Cochrane wrote in a note.

UK retailers are headed for their best year since 2019, with an index for the sector up 24%, boosted by the return of shoppers to physical stores following the end of pandemic-era restrictions. Defying concern over a slowdown in consumer spending, Marks & Spencer Group Plc has more than doubled in 2023, with Next Plc and budget retailer B&M European Value Retail SA each up more than 30%.

According to Cochrane, investors shouldn’t count on the same level of sales and margin surprises across the sector next year. He advises being selective when picking the next batch of winners.

With that in mind, the analyst initiated coverage of M&S, B&M and online retailer Asos Plc with buy ratings, saying he expects to see a “fundamental change in operations” which is not yet reflected in valuations.

READ: Nov. 8, M&S Shares Jump After Dividend Returns and Profit Soars

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