David Jones' appetite for Australia's up-market food sector will lure big-spending shoppers away from Coles and Woolies and take a bite out of the grocery chains' future earnings, Moody's warns.

The credit ratings agency said David Jones' South African owner's focus on premium private label food is "credit negative" to Woolworths and the Wesfarmers'-owned Coles as the department store chain forges ahead with plans to capture the top end of the grocery market.

Wesfarmers is currently rated A3 stable and Woolworths has a Baa2 negative rating, which analysts claims will be under pressure until it can demonstrate an improved operating performance.

According to Moody's Investors Service vice president Ian Chitterer, the launch of David Jones' first upmarket food store in Sydney later this financial year will intensify competition for the high-income, premium shoppers.