Will Tesco plc, Crawshaw Group plc and Conviviality plc keep on falling?

With 2016 set to be a tough year for the UK retail sector, it's perhaps unsurprising that investor sentiment towards retail stocks has come under pressure. In fact, a number of stocks in the food and drugs retail sector have seen their share prices decline in the last month. Could this be set to continue?

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Crawshaw Group

Shares in meat and food-to-go retailer Crawshaw Group(LSE: CRAW) have slumped by 7% in the last month. Looking ahead, there could be further challenges to come since the company is forecast to stay in the red in the current year. Certainly, its pre-tax loss of £0.34m from last year is due to narrow to £0.2m this year, but with concerns already being high for the wider retail sector, investor sentiment in Crawshaw could decline further.

While Crawshaw is expected to move back into profitability in 2016, this appears to be more than adequately priced-in by the market. For example, Crawshaw trades on a forward price-to-earnings (P/E) ratio of 142, which indicates that now may not be the best time to buy.

Conviviality

Also falling in the last month have been shares in Conviviality (LSE: CVR), with the convenience store operator seeing its valuation fall by 7% during the period. Clearly, the convenience store space is becoming increasingly competitive as the major supermarket players continue to plough investment into it as frequent, smaller visits for groceries become increasingly popular among shoppers.

Despite this, Conviviality is expected to report strong bottom-line growth over the medium term, with its earnings forecast to rise by 44% in the current year, followed by growth of 15% in the next financial year. Even though it's due to report such upbeat growth numbers, Conviviality trades on a P/E ratio of just 9.7, which when combined with its growth prospects equates to a price-to-earnings growth (PEG) ratio of just 0.3.

This indicates that there's tremendous upside potential and with Conviviality offering a yield of 4.6% from a dividend that's covered 2.3 times by profit, it seems to offer strong growth, value and income prospects.

Tesco

Meanwhile, shares in Tesco(LSE: TSCO) have slumped by over 7% in the last month as investor confidence in its turnaround story seems to be wavering. Of course, Amazon's venture into online grocery shopping may be at least partly to blame as it brings a financially powerful business into the mix. And with Amazon being focused on the long term and on winning market share rather than on short-term profitability, Tesco's financial performance could suffer.

However, with Tesco's share price likely to be impacted by its ability to sell-off non-core assets such as food chain Giraffe and its success in streamlining the business through improved supply chain processes, its shares could still rise even if the supermarket sector becomes increasingly competitive. As such, it seems to be a worthy purchase at the present time - especially since it trades on a PEG ratio of just 0.4.

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Peter Stephens owns shares of Tesco. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.