The lack of further deterioration in the outlook for Europe's economy and improving consumer confidence are likely to benefit listed food retailers while those focused on the U.S. and emerging markets will see growth, BoFA-ML said.
Broadly, higher commodity prices are contributing to returning expectations of food price inflation.
That is bad news for the UK supermarket sector which will likely grapple with a slowing economy pushing customers towards cheaper offerings or discounts, the broker said in a note to clients.
BofA-ML analysts upgraded France's Casino (>> Casino Guichard) to "Buy" and downgraded WM Morrison (>> WM Morrison Supermarkets PLC) to "underperform".
Casino shares rose more than 4 percent in early trading.
UK supermarkets are poised to report holiday season trading updates this week.
(Reporting by Vikram Subhedar, editing by Kit Rees)