Fitch Ratings 2019 Outlook: European Retail

...Fitch's Sector Outlook: Negative The non-food retail outlook remains negative as business models are eroded by structural changes in consumption and online competition. There is a spending shift away from physical products towards services and experiences. Competition is fierce due to fast-growing web-based retailers. Traditional `bricks and mortar' sellers have to update IT and distribution systems, and are at a disadvantage as not starting with a clean sheet. The food retail outlook remains stable as traditional retailers' initiatives to revive their core businesses are bearing fruit. Global competition hurt margins, but online rivalry is less acute than in non-food. Rating Trajectory: Static Fitch Ratings does not expect significant rating actions in 2019, following downgrades in the clothing sector in 2018. Business-model issues in both the food and non-food sectors are already reflected in current rating levels; for non-food retail, non-investment-grade (IG) ratings could come under...

Outlook