...] Improving Core Market Sales but Delayed Profit Recovery Following large price cuts European food retailers' like-for-like sales (LFL) are now improving in their core markets. However, Fitch expects a further deterioration in operating margins in 2015 and limited recovery in 2016 in spite of LFL sales growth providing some support for profitability. Competitive price pressure in mature markets and high exposure to emerging countries ¡ Russia for Metro, and Brazil for Carrefour and Casino in particular ¡ will hamper any meaningful EBIT enhancement in 2016. What to Watch Improving Sales in Core Markets: In mature Europe Carrefour and Ahold, and now Casino, are experiencing LFL sales growth. Tesco's and Metro's LFL sales are still declining but on an improving trend. Fitch expects further progress by year-end as higher consumer confidence should support volumes and compensate for continued price pressure. Weak Operating Margin: In 2014 average EBIT margin dropped below Fitch's 'bbb' category...
