By investment bank JP Morgan.

JP Morgan has followed in Citigroup’s steps and downgraded profit forecasts for Myer, JB Hi-Fi and Harvey Norman after assessing the impact of Amazon’s expansion and weak consumer spending.

JP Morgan believes Myer is likely to be the hardest hit and has cut profit forecasts by 14.9% in 2018 and 30.1% in 2019. JB Hi-Fi forecasts have been cut by 14% in 2018 and 20.7% in 2019, Harvey Norman by 3.1% and 12.2%.

“The outlook for the Australian consumer is deteriorating, in our view, while the pending entry of Amazon is a negative for multiples and earnings per share forecasts,” JP Morgan said in a report on Thursday.

JP Morgan said Amazon’s expansion into Australia would be good for consumers, but would put downward pressure on prices and margins across a wide range of retail categories, squeezing earnings and reducing share price multiples.

“While the offer (price, range, Amazon Prime) and timing are unknown, the expectation is that Amazon drives retail deflation, assisting consumers, but the threat of disruption has reduced earnings multiples for the medium term,” JP Morgan said.

It expects like-for-like sales growth to decline by a further 100 basis points in 2019 and 2020 as retailers lose market share and prices come under pressure. Gross margins are also likely to fall as retailers cut prices to narrow the price differential with Amazon.